ORAL ANSWERS TO QUESTIONS

INTERNATIONAL DEVELOPMENT

The Secretary of State was asked—

Afghanistan

Mark Harper: What assessment he has made of the effectiveness of his Department's spending through the UN Development Programme in Afghanistan.

Douglas Alexander: Given that the question relates to Afghanistan, may I begin by expressing—on behalf, I am sure, of the whole House—my condolences to the family of the brave officer of the Welsh Guards who passed away today as a result of injuries sustained in Helmand? He is the fifth UK serviceman to have given their life in Afghanistan this month, and they are all in our thoughts and prayers.
	The UNDP is an important partner for the Department for International Development in Afghanistan, providing expertise in areas such as voter registration and support for the democratic elections. The Department's funding has helped to ensure the success of the voter registration process. It also helped to launch the Afghanistan national development strategy, which unites the Governments of Afghanistan and the UK, and other partner Governments, behind a common vision to help to build a new Afghanistan.

Mark Harper: I am very grateful to the Secretary of State for that answer, and I am sure that all Opposition Members join him in passing on our condolences to the family of that brave soldier. My local regiment, 1st Battalion the Rifles, lost seven men in Afghanistan on their recent tour of duty. When I visited the battalion, I saw for myself their dedication and commitment to rebuilding that country. Is the Secretary of State satisfied that our international development efforts and those of our NATO partners match the dedication and commitment shown to Afghanistan by members of our armed forces?

Douglas Alexander: I am unyielding in my admiration for our armed forces, having had, like the hon. Gentleman, the great privilege of seeing for myself the extraordinary sacrifices that they make, and the professionalism and dedication that they bring to their task. Frankly, the international community could have done a better job over recent years, and we are working tirelessly with partners in the international coalition to ensure that we strengthen the degree of co-ordination that is necessary if the aid operation is to be as effective as it should be. For example, we spend a significant proportion of our money with the Government of Afghanistan, recognising the challenges that that poses, but also the potential benefits. We also spend a significant proportion of our funding in country. Regrettably, that is not the case for all our principal partners.

Roberta Blackman-Woods: I welcome the Department's publication of the new country plan for Afghanistan, and the Government's ongoing commitment to providing aid to the Afghan people, but will my right hon. Friend say what his Department is doing to ensure greater co-ordination of the international aid effort in Afghanistan?

Douglas Alexander: I have met Kai Eide of the United Nations, and have discussed the matter with our American counterparts. We account for a significant contribution to the international effort, and we use whatever forums are available to us to argue that where best practice is established by any country, it should be replicated by other countries. We are, of course, working closely with the Government of Afghanistan, who also have a heavy responsibility. I assure my hon. Friend that the matter is also a subject of conversation between our Prime Minister and the President of the United States.

Robert Smith: The Secretary of State rightly paid tribute to the efforts of the British forces in Afghanistan, but stability is crucial to successful development there. What discussions has he had with the American authorities on how their new military stance will be used to reduce civilian casualties, and so ensure a more stable environment in which to deliver development?

Douglas Alexander: As the hon. Gentleman will be aware, Robert Gates, the US Defence Secretary, has announced a change of command in recent days. I was not privy to the discussions in the Pentagon and the Department of Defence, but I am confident that my right hon. Friends the Foreign Secretary and the Prime Minister discuss those issues at every appropriate opportunity. They discuss both the significance of the regional response—there is recognition now of the significance of Pakistan, as well as Afghanistan, to security in Afghanistan—and the need to take forward a genuinely comprehensive approach that involves political reconciliation with those who are willing to be part of the democratic process, genuine development work, and the necessary element of force in security.

Derek Twigg: I congratulate my right hon. Friend on the energy and hard work that he puts into ensuring that development cash gets to where it is needed, but how confident is he on the issue of corruption among officials in Afghanistan, and about the commitment by President Karzai's Government to do something about it, to ensure that money gets to where it is needed most?

Douglas Alexander: Let me return the compliment by paying tribute to the work of my hon. Friend during his service in the Ministry of Defence. I know that he had a tireless commitment to the interests and welfare of our troops, and I pay tribute to that. Only in recent weeks, I had the opportunity to meet the new Minister of Finance in Afghanistan, and the subject—including the terms of the assurances that he could offer and the work that he was determined to take forward—was at the top of the agenda. I was heartened by the response that he offered me, but clearly we will need to keep working on the issue, although principal responsibility rests with the Government of Afghanistan.

Andrew Mitchell: I join the Secretary of State in sending our condolences to the friends and family of the Welsh Guards officer who died in Selly Oak this morning.
	The Secretary of State will know that the National Audit Office has criticised his Department for handing over £20 million of taxpayers' money to the Afghan Counter-narcotics trust fund, which the UNDP was too inexperienced to manage effectively. Was DFID aware of the serious concerns about the competence of the UNDP when it handed over that money?

Douglas Alexander: It is for exactly those reasons that we withdrew support to the underperforming counter-narcotics trust fund as soon as we became aware of the scale of the challenge that was faced in the delivery of a very difficult programme in a very difficult environment. It is right to recognise that that is a challenging environment and to be subject to the scrutiny of the National Audit Office, and where evidence was brought to our attention, action was taken.

Andrew Mitchell: So can the Secretary of State tell the House what steps he is taking to ensure that the extra £14 million that he had just signed off for the UNDP in Afghanistan is subject to proper, independent, effective impact evaluation so that British taxpayers know they are getting value for money, and British troops know their bravery is reinforced by an effective and successful aid effort?

Douglas Alexander: On the evaluation of the UNDP, an internal evaluation unit has recently been established which reviewed the work of the UNDP. It concluded that many of the UNDP's programmes are effective and delivering, particularly in the areas of public administration and support for democratic institutions, but the hon. Gentleman is correct in recognising that there needs to be substantive progress from the UNDP in certain areas. The next opportunity for us to raise those concerns, which we will raise, will be at the UNDP board later this month. That is an undertaking that I give to the House.

Michael Moore: I, too, send the condolences of my right hon. and hon. Friends to the family of the solider who died this morning, and remember those who have given their lives in Afghanistan. I join the Secretary of State in paying tribute to the bravery, professionalism and dedication of all our armed forces in Afghanistan, and also to the members of his Department who work in incredibly difficult circumstances on our collective behalf.
	Two weeks ago the Prime Minister set out a welcome new joint security strategy that linked Afghanistan and Pakistan. Separately, the Afghanistan stabilisation fund has been pooled with the conflict prevention fund for south Asia, which has a broader remit, including crisis areas such as Sri Lanka. Can the Secretary of State share with the House how the new Afghanistan-Pakistan joint focus will be helped by these new broader arrangements?

Douglas Alexander: Let me thank the hon. Gentleman both for his remarks about the officials of the Department, who do outstanding work, and for the tribute that he paid on behalf of the whole House to the service and heroism of our service personnel. On the joint approach to Afghanistan and Pakistan, he is right to say that there is a fundamental recognition that Pakistan needs to be the beginning, not the end, of the conversation in relation to Afghanistan. That is why we have worked so closely with the American Administration in recent weeks to ensure that there is a genuinely common approach to the issue, why I will take the opportunity this week to meet President Zardari of Pakistan, and why it is not coincidental that we published our Afghan country plan simultaneously with the Prime Minister making a statement to the House on the regional response. Whether it be through our programme in Pakistan, our programme in Afghanistan or the close joint working that is now established with both the Ministry of Defence and the Foreign and Commonwealth Office, I can assure the hon. Gentleman that there is a genuinely co-ordinated approach.

Burma

John Bercow: What steps he has taken to increase the delivery of humanitarian aid throughout Burma.

Gareth Thomas: In March the Government decided to provide an additional £20 million to Burma over two years. We will continue to address cyclone recovery needs in the Irrawaddy delta, as well as expanding our programme across the rest of the country, and we will also increase our aid to Burmese refugees in Thailand.

John Bercow: I am grateful to the hon. Gentleman for that illuminating reply. As he will know, the International Development Committee's 2007 report on assistance to internally displaced people and refugees on the Thai-Burma border recommended that DFID support cross-border aid into eastern Burma, in particular for the Karen people. Will the Minister now pledge to act on that recommendation?

Gareth Thomas: As the hon. Gentleman knows, my right hon. Friend the Secretary of State has visited some of the camps to which he refers. He may also be aware that we have increased our funding to the Thailand Burma Border Consortium by some 10 per cent. this year, on top of an additional 30 per cent. last year. We have also increased our funding to other organisations that work with Burmese refugees—some £1.8 million over the next three years—so we have continued to follow through on the spirit of the recommendations of that Select Committee inquiry.

John Battle: I thank my hon. Friend for his commitment on aid to Burma and pay tribute to the hon. Member for Buckingham (John Bercow), who has tirelessly campaigned on behalf of the Burmese people. I support the hon. Gentleman's question, because, although I welcome the money that is going to Burma, given the difficulty of the situation there must be a resolution in respect of the thousands of people who have been marooned for months and years on the border. That situation cannot be left to the Thai Government. Could we take more action internationally, in terms of humanitarian support and from without to resolve the situation in the longer term?

Gareth Thomas: My right hon. Friend alludes to a much wider problem with Burma: the basic lack of civil and human rights in that country and the need for major reform by the Burmese authorities. We want to see, first off, the release of all political prisoners in Burma, starting with Aung San Suu Kyi. The Prime Minister, the Foreign Secretary and the International Development Secretary continue to raise that issue—the need for reform, starting with the release of Aung San Suu Kyi—at every opportunity. Most recently, we used the G20 summit to continue to press that point with a number of key partners.

Tony Baldry: In Burma, Sudan, Darfur, Zimbabwe and Sri Lanka, we are seeing the continued shrinking of humanitarian space. DFID and other agencies are having to work around de jure Governments, not in partnership with them. Is it not time that the United Nations Security Council did more to make a reality of the theoretical concept of the responsibility to protect?

Gareth Thomas: The hon. Gentleman raises a significant issue—that of humanitarian space and ensuring that humanitarian organisations such as the Red Cross, and many other non-governmental organisations, have the opportunity to continue to provide humanitarian support to people in desperate situations as a result of conflicts and other disasters. One thing that the Department continues to do is to work extremely closely with the Office for the Co-ordination of Humanitarian Assistance, the key UN body that leads on these issues. We are working with OCHA and other partners on how we can get a better international humanitarian system precisely to help on the delivery of aid, and to try to achieve the humanitarian space that the hon. Gentleman quite rightly says we must continue to champion.

Zimbabwe

James McGovern: What his latest assessment is of the humanitarian situation in Zimbabwe; and if he will make a statement.

Ivan Lewis: There has been a modest improvement in the humanitarian situation. The cholera epidemic is under control and there are signs of an improved harvest this year. However, basic health and other welfare services have broken down after years of neglect. Consequently, Zimbabwe faces ongoing humanitarian challenges.

James McGovern: I thank the Minister for that answer. Obviously, all Members will be aware of the lack of political and judicial reform in Zimbabwe, but will the Minister confirm that he has received a communication from the Elders, urging the UK to offer Humanitarian Plus funds to Zimbabwe? Humanitarian Plus differs from long-term financial assistance, which will be linked to reform, and would allow immediate rehabilitation of the water and sanitation infrastructure in Zimbabwe.

Ivan Lewis: My hon. Friend is absolutely right to draw attention to the important contribution that the Elders are making to securing progress in Zimbabwe. We recently announced £15 million to strengthen health system support, improve sanitation and further strengthen food security, but we make it very clear that, on the pace of reform, there are certain non-negotiables. We make that clear in our conversations with the new Prime Minister and the Finance Minister, whom my right hon. Friends the International Development Secretary and the Foreign Secretary met recently. The United Kingdom provides humanitarian and Humanitarian Plus support, but we still await further improvement in terms of the necessary reforms.

Nicholas Winterton: Unfortunately, Zimbabwe has been put on the back burner again, because other issues are dominating Parliament and international affairs. Does the Minister not agree that one of the most helpful actions that the Government could take would be for the Secretary of State for International Development to visit Zimbabwe and meet the Prime Minister, Morgan Tsvangirai, to give that very courageous man the credibility and support that he deserves? He seeks to lead his country out of poverty and deprivation.

Ivan Lewis: Of course, it is not for me to arrange my right hon. Friend's travel itinerary. However, my serious response is that he recently met the Finance Minister, in whom we have a lot of confidence, and he has also met the Prime Minister in the past. My noble Friend Lord Malloch-Brown, the Minister for Africa, was at the inauguration of the new President of South Africa and recently met Morgan Tsvangirai and the new Foreign Minister of Zimbabwe. There is constant engagement and dialogue with the Government of Zimbabwe. We are clear about the support that we stand ready to provide and we have announced the resources that I mentioned in my earlier response. However, there can be no slacking in the message about the importance of political and economic as well as human rights reform. We remain concerned that, for example, political prisoners have recently been returned to prison. In those circumstances, we need to send strong messages about the pace of reform.

Andrew Smith: Will my hon. Friend join me in congratulating my constituent, Richard Pantlin, who recently cycled round Zimbabwe, raising funds for an orphanage there? Does he share my constituent's conclusion that we need to find ways of increasing humanitarian aid and support for the people of Zimbabwe, without strengthening ZANU-PF?

Ivan Lewis: My right hon. Friend is right to draw attention to the contribution of individuals, which demonstrates that no way is Zimbabwe on the back burner in respect of how the British people feel about our relationship with that country or in Department for International Development staff's excellent work on the front line. My right hon. Friend is right to say that, as a result of our support, 7 million people were fed in March who would not otherwise have been fed; the cholera outbreak has been brought under control; and we are moving towards more support for Humanitarian Plus. Equally, we expect the Zimbabwean Government to fulfil the obligations they have entered into with the international community on a clear and transparent reform agenda.

Nicholas Soames: Given the non-negotiables—quite right, too—may I endorse the words of my hon. Friend the Member for Macclesfield (Sir Nicholas Winterton) and ask the Under-Secretary to continue to help in the humanitarian way the Government are rightly doing? What grounds for optimism does he have in the light of Morgan Tsvangirai's extraordinary courage and achievements?

Ivan Lewis: The optimism results from the changes that the Prime Minister, the Finance Minister and other reformers in the Zimbabwean Government make. Their optimism gives us hope. However, we also know that forces still exist in the Government who do not embrace the reform agenda, and we need them to do that. That is why it is important to send a message of solidarity and support, and make resources available to back the Prime Minister and the reform programme, while also making it clear that there will be no normalisation of relationships with that country until the entire Government are focused on meeting the needs of the ordinary people of Zimbabwe and rebuilding the economy and the health and education systems.

Hilary Armstrong: In the midst of the turmoil in Zimbabwe, what assurance can my hon. Friend give the House about opportunities for children to get education? That will be the way in which the country can rebuild and give people real hope for the future.

Ivan Lewis: My right hon. Friend raises an important issue. We know that many schools in Zimbabwe have not opened this year. Teachers are rightly demanding salaries in hard currency and poor Zimbabweans cannot go to schools that charge in US dollars. That emphasises the importance of the Government's rebuilding the education system, starting with paying teachers properly so that they turn up to teach the children of Zimbabwe. The good news is that, through UNICEF, we have ensured, with United Kingdom support, that more than 100,000 orphans and vulnerable children remain in school. That would not have happened without UK investment.

Mark Durkan: I welcome the Minister's indication that the cholera outbreak is under control, but what is his assessment of the situation in Zimbabwe in respect of HIV/AIDS, a problem that was callously and deliberately neglected by the Mugabe Administration?

Ivan Lewis: Part of the extra support made available by us, both in the past and most recently, to strengthen health systems is about ensuring that the Zimbabwean health system has the capacity to tackle HIV/AIDS properly. We also want the new President in South Africa to remain committed to the new approach to HIV/AIDS there, which does not just affect attitudes in that country, but affects attitudes to how HIV/AIDS is tackled across the African continent. Our support for strengthening the health system means that we hope for a rapid improvement in the fight against HIV/AIDS.

Sri Lanka

David Jones: What recent assessment he has made of the humanitarian situation in Sri Lanka; and if he will make a statement.

Peter Luff: What recent assessment he has made of the humanitarian situation in northern Sri Lanka; and if he will make a statement.

Michael Foster: The humanitarian situation remains severe in the conflict area. The UN estimates that there are around 50,000 civilians trapped in an area of just 3 sq km. The International Committee of the Red Cross is the only humanitarian agency allowed access, and every humanitarian need in the area is unmet. For the 190,000 internally displaced persons in camps away from the conflict area, such as those that I visited two weeks ago, the conditions are best described as basic.

David Jones: Yesterday's Human Rights Watch report would appear to confirm beyond reasonable doubt that, contrary to their denials, Sri Lankan forces continue to bombard the Mullaittivu area, an action that has resulted in more than 100 deaths in the past few days, according to reports on the ground. Can the Minister say what representations the Government are making to the Sri Lankan authorities with a view to persuading them to cease the bombardment and allow humanitarian workers into that area, which is, after all, meant to be a no-fire zone?

Michael Foster: The hon. Gentleman raises an important point, and one that certainly featured in the conversations that I had with the Foreign Minister in Sri Lanka when I was there two weeks ago. Indeed, the hon. Gentleman's exact request was also a feature of the conversation that I had with the Sri Lankan high commissioner just this morning.

Peter Luff: The Minister will understand the sensitivity around the screening process for those seeking to enter refugee camps in Sri Lanka. I am sure he is aware of the concerns expressed by the UN Under-Secretary-General John Holmes about that process and, in particular, about allegations of possible pre-screening by the Sri Lankan army. Can the Minister assure me that Her Majesty's Government are doing all in their power to ensure that the screening process is conducted both fairly and properly?

Michael Foster: It is always good to agree with the hon. Gentleman, a near neighbour of mine. We raised the issue of the screening process in conversations that I had with John Holmes when we were in Sri Lanka together. We have called for an international presence to be there during the screening process to give it credibility and give the assurance that the Tamil population is looking for.

Keith Vaz: I thank the Minister for what he has done so far, including taking my call at 5 am on the current humanitarian crisis in Sri Lanka when he was in Indonesia. The key is ensuring that the boat that is just off the coast of Sri Lanka can deliver the tonnes of aid that the Red Cross has already collected. What further steps can we take to ensure the safe passage of that food from the boat into the Tamil areas?

Michael Foster: I pay tribute to my right hon. Friend's commitment on the issue, which his early morning phone call clearly demonstrated. The Red Cross was able to unload 25 tonnes of food into the conflict area by boat on Saturday. It was hoping to repeat the process yesterday, but was unable to do so because of fierce fighting in the area. We urge both the Government of Sri Lanka and the Liberation Tigers of Tamil Eelam to stop the fighting so that the Red Cross can continue its most valuable work.

Mike Gapes: Is it not now clear that there has been firing into a zone that is supposed to be for humanitarian protection? Is that not a war crime? What action will the Government be taking, with the rest of the international community, to put pressure on the Government of Sri Lanka to stop firing into hospitals, schools and civilian areas?

Michael Foster: Not only have we called on the Government of Sri Lanka and the LTTE for a ceasefire in the area, but we have made it clear in a debate in this House that we are calling for an early investigation to see whether crimes have been committed against civilians, and that we consider it vital that alleged war crimes are properly investigated. We will be pursuing a mechanism for a transparent inquiry into that process.

Geoffrey Clifton-Brown: I am sure that the whole House will have been shocked by the shelling of the Mullivaikal hospital and the consequent loss of life. What more can the Minister's Department do to impress on the Sri Lankan Government that they should allow into the country all the aid—not just the food aid—that his Department allocates, and that they must ensure that it reaches those for whom it is intended?

Michael Foster: I met the Sri Lankan high commissioner this morning to request not only greater international humanitarian access to the camps but United Nations access to the conflict zone, so that we can make a proper assessment of the needs in that area. I should like to pay tribute to the Red Cross worker who was killed yesterday in the conflict zone. He was a water technician who was working to try to save lives, not to prolong the conflict, and he has paid the ultimate price for doing that.

PRIME MINISTER

The Prime Minister was asked—

Engagements

Howard Stoate: If he will list his official engagements for Wednesday 13 May.

Gordon Brown: Before listing my engagements, I am sure that the whole House will join in expressing our condolences to the family and friends of those who were killed on operations in Afghanistan in the last week. They were: Sergeant Benjamin Ross of the 3rd Regiment the Royal Military Police; Corporal Sean Binnie of the 3rd Battalion the Royal Regiment of Scotland, the Black Watch; Rifleman Adrian Sheldon of the 2nd Battalion the Rifles; Corporal Kumar Pun of the 1st Battalion the Royal Gurkha Rifles; and a soldier from the 1st Battalion the Welsh Guards, who died yesterday of wounds sustained in Afghanistan at the weekend.
	I have been fortunate enough to witness at first hand the bravery, professionalism and dedication of our soldiers from every battalion fighting for us in Afghanistan. We are determined to ensure that we can be a force for good in helping the people of Afghanistan and protecting the security of people in Britain and the wider world. These men, and all those who have lost their lives in conflict, deserve our profound gratitude. Their service will never be forgotten.
	This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

Howard Stoate: I associate myself—as, I am sure, does the whole House—with the condolences paid by my right hon. Friend to the families of the brave soldiers who have lost their lives in Afghanistan.
	The whole country is deeply concerned about MPs' expenses, and public anger is surely heightened because of people's own financial and economic circumstances. Laing O'Rourke, a major construction firm in my constituency, has just announced that it is taking on several hundred extra apprentices this year, but unemployment nationally remains extremely worrying. What can my right hon. Friend do to invest in skills and jobs to ensure that we are well placed when we come out of the recession? I am sure that he would agree that unemployment is never a price worth paying.

Gordon Brown: In answer to my hon. Friend's first point, our responsibility is to create a system of MPs' allowances that is transparent and will be seen by the country as wholly fair. We must prove ourselves worthy of the public's trust. We must apologise for the mistakes that have been made. We must rectify all the errors that have happened, and we must reconstruct the system in a way that the public will see as building confidence in the political process. I believe that the steps that were taken last night by the Members' Allowances Committee were the first important steps in dealing with this matter for the whole of the House together.
	My hon. Friend is absolutely right: any unemployment is a tragedy in any area of the country, and it is our duty to do everything we can to help those people who are unemployed. Where people are being taken on, there is help available. Where people are on short time, we are providing help through the working tax credit and through training allowances. For where people have become unemployed, we have announced today the details of a scheme under which, for all 18 to 24-year-olds who are unemployed and out of work, there will be an offer after a year of training or of work. I am grateful that social entrepreneurs, as well as charitable organisations, are already involved in the offer of work. We aim to provide 150,000 jobs as a result of the initiative that is being taken today.

David Cameron: I join the Prime Minister in paying tribute to the officer from the Welsh Guards who died of his wounds at Selly Oak hospital, and to the four service men who were killed last Thursday: Corporal Kumar Pun of the Royal Gurkha Rifles, Corporal Sean Binnie of the Black Watch, Rifleman Adrian Sheldon of 2nd Battalion the Rifles, and Sergeant Ben Ross of the Royal Military Police. Such a tragic loss of life in a single day should remind us of all the bravery that all our service men and women show every day. They have all made sacrifices on behalf of our country, and we must never forget them.
	Let me ask about the issue of MPs' expenses. The first words that the Prime Minister said about them today concerned the need for transparency. Does he agree that one thing we could do pretty much right now is publish our expenses online the moment we put in a claim? Should that not happen online in real time? Does the Prime Minister agree that MPs from all parties should do that now?

Gordon Brown: Yes, Mr. Speaker, I understand that the Committee on Members' Allowances is looking at the issue. I think it important for there to be a transparent system so that when a claim is reported to the Fees Office, the Fees Office can itself put it on the internet. That should be a responsibility of the system of the House, and I hope that it will be introduced as soon as possible.
	I hope that every Member of the House, in considering this issue, will agree that if trust in politics dissipates or disappears, the whole political system cannot work properly. I think that we all have a duty now to ensure that the agreements that we reach and the independent reviews that are carried out are such that they can restore confidence in the system.
	As for last night's proposal from the Committee on Members' Allowances, I think it important, as the Committee has suggested, for the receipts and payments of Members over the last four years to be scrutinised by a body that includes people who are completely independent of the political system. By doing that for all MPs over a period of four years, we can show the public that we have taken every necessary action to deal with any anomalies, to repair them, and at the same time to build the confidence in the political system that is necessary for the future. I believe that this is a matter in which all parties will want to be engaged, and it is important that we deal with it now.

David Cameron: Of course I agree with the Prime Minister that we should all support the Kelly commission and the work that it is doing, and yes, we should all support the idea of establishing a committee to look back over the last four years, but is there not a problem with this, and does it not show that we need to get on with things now? If we just ask a committee whether everyone has obeyed the rules, it will take a long time to investigate and will then, I think, find—surprise, surprise—that everyone has obeyed the rules. The issue is not so much about whether the rules were obeyed as about the rules themselves. How much needs to be paid back is not really a legal issue; it is a moral and an ethical issue, and it requires some political leadership to sort it out. Does the Prime Minister not understand that?

Gordon Brown: Yes, I do, and the leadership means leadership in the whole political system. We have a duty to look across the political system—all parties—to act together, as the Committee tried to do yesterday, and to reach an agreement.
	The Committee's proposals are extreme and radical. It will ask outsiders to look at receipts, expenses and payments over the last four years, and will then report on whether they were regular or irregular. That is dealing with the past. For the present, the Committee proposed an interim system, and I believe that it can command all-party support. However, the long-term changes will require the confidence of the public, which is why, as I have said before, I have always believed that we need an outside body—the Committee on Standards in Public Life—to report on what should be done. Its proposals must then be taken into account by the House.
	If we are to make changes in the system, however, we need an outside body—a body carrying some confidence that it is acting completely impartially—that can report on the changes that we can make, and I believe that it should report as soon as possible. I believe that it is in the interests of everyone that we go beyond ordinary party politics, and that we make absolutely sure that what we do affects the whole House and all Members, and the way in which they behave.

David Cameron: I am grateful for the Prime Minister's answer but I still think that there is going to be a problem with just saying, "Let's go back and look at the claims people made under the rules"— [Interruption.] Members are shouting but that is again part of the problem in this House—let us be frank about it.
	Let us see if that committee can do it. However, if we just look at the rules and whether people were complying with them, that does not go to the heart of the problem. It does not go to the heart of the anger that people feel. That is why Members of Parliament on both sides of the House decided to write out cheques and send money back, and I think that that is right.
	Let me turn to another issue: reducing the cost of politics more generally. If we are frank, many of us know that the next issue we have to tackle is the communications allowance that was introduced only two years ago. It is worth £10,000 to every MP. Let us be honest: taxpayers are effectively paying out thousands of pounds so we can all tell our constituents what a wonderful job we are all doing. We have all done it; we all know the facts. Is not this a gigantic waste of money? Will the Prime Minister now get on with something I have suggested many times? Let us save some money—scrap the communications allowance now.

Gordon Brown: The first way we are going to save money is through the changes that were voted on in the House two weeks ago—changes that I and others put to the House—about how we can save money on the London allowance, how we can reduce the cost of the additional cost allowance and how we can get the receipts fully dealt with—even those below £25—and submitted. That is the first stage of reducing cost, and the costs of the system will fall.
	I have to say something about the right hon. Gentleman's point about rules as well. It is true in some cases that rules have not been properly obeyed and action has to be taken—I think that everyone will agree with that. It is also true that there is a looseness sometimes in the interpretation of the rules, or that the rules themselves are too loose. That is what the Committee on Standards in Public Life has to look at, but I hesitate to say that one or two Members of this House can get together and write the new rules on everything. We need independent scrutiny to assure the public that people can have confidence in the system.
	As for the communications allowance, all allowances always have to be looked at. This, again, followed a vote of the House—a vote involving all Members of the House.

David Cameron: Let me ask the Prime Minister, in short order: how does he, in this current recession, when businesses are facing such difficult times and people are having to make such reductions in their own expenditure, justify the £10,000 communications allowance?

Gordon Brown: In this period, all members of the Government have frozen their salaries. I have myself refused to take the pension that may be given to any serving Prime Minister. I have refused the London allowance that is available to me. I think that all Members of the House have to look at what they can do in their own situations. As far as the communications allowance is concerned, it is open to the House to look at all these things, but a vote of the House took place. It is always open to Members to propose changing it.

David Cameron: The Prime Minister says that it is open to the House. That is so often his answer. What we want is some leadership to cut some of these costs. He seems to have such a tin ear to these issues. In an age where we are going to have to ask the public sector to do more for less, should we not start with ourselves? We have in the House of Commons 646— [Interruption.]

Mr. Speaker: Order. Let the Leader of the Opposition speak.

David Cameron: I am just making the point— [Interruption.]

Mr. Speaker: Order. I have asked hon. Members to be quiet. I do not expect more noise.

David Cameron: The House of Commons has 646 MPs. We have one of the largest lower Houses in the western world—larger than in Spain, France, Germany and Italy. In fact, if we take the Lords and Commons together, we have more political representatives than any country other than China. Should we not reduce the cost of politics by asking the next Boundary Commission to reduce the size of the House of Commons?

Gordon Brown: Many of the countries that the right hon. Gentleman is talking about are federal systems that have not only central Parliaments but federal Parliaments. I do not know whether he is proposing that we make an instant judgment now to reduce the number of MPs by 50, 100 or 150. Those are matters that have to go before an independent commission and people have to look at the boundaries. On all these issues, I am trying to build a political consensus on change. I am trying to build a consensus across all— [Interruption.]

Mr. Speaker: Order. The Prime Minister must be heard as well.

Gordon Brown: I am trying to build a political consensus on change. It is unfortunate that we cannot today highlight those issues on which we agree that action needs to be taken immediately. That is the way forward for this House to restore trust in its affairs. We have got to deal immediately with the issues ahead of us. We have got to take the extreme action that I propose—I hope the right hon. Gentleman will be able to support it—and, at the same time, we have got to reform the expenses system. I think that today is a time for us all to come together to make the changes that are necessary.

David Cameron: I must say to the Prime Minister that Spain and France are not federal systems, and they have much smaller Parliaments than we do. The Prime Minister says again that he wants to have an independent commission. I sometimes wonder whether— [Interruption.]

Mr. Speaker: Order. Let the Leader of the Opposition speak.  [Interruption.] Order. Dr. Howells, please; the Leader of the Opposition must be able to speak.

David Cameron: Thank you, Mr. Speaker. I wonder whether the Prime Minister needs an independent commission to work out whether to have tea or coffee in the morning. Whether by putting expenses online, by cutting the cost of politics by abolishing the communications allowance, or by making this place smaller and more efficient, is it not time to wake up and see what is going on in the country? Is it not time for us to see ourselves as the rest of the country sees us? Is it not time to stop the talking and the endless committees, and start showing some real leadership to deliver some real change? How can we bring about the change this country needs if we cannot change ourselves?

Gordon Brown: It is precisely because we have to change that these radical proposals are being put forward. I am sorry that the right hon. Gentleman has chosen today to divide on issues, instead of to concentrate on the issues on which we agree. I think everybody will agree that this is a problem of the political system that has got to be dealt with by all of us. If we are to restore confidence in politics, that means restoring confidence in all of politics, and it means all Members of Parliament being part of that process of restoring confidence. Leadership is about the whole of the political system responding to the changes that need to be made, and leadership is me saying to all the political parties that they have got to act immediately to change the system. I hope that, on reflection, the right hon. Gentleman will agree that what is most important for politics today is to move forward with the changes on which we can agree and that are urgently necessary. Of course we should discuss other issues over a period of time, but we must discuss them in a way that is non-partisan so that we can reach proper agreement.

Roger Berry: Many organisations support the Equality Bill: Age Concern, Carers UK and all the disability organisations. Is my right hon. Friend aware that, when opposing the Bill on Monday, the Opposition could cite one organisation on their side: the Campaign Against Political Correctness? Will he assure the House that he will continue to support the views of Age Concern, Carers UK and the disability organisations and reject the views of those who oppose equality?

Gordon Brown: This is another issue on which it would be good to have political consensus. Discrimination on grounds of age or of being a carer is simply not acceptable in modern society. I hope that, despite the debates that have taken place in the last few days, we can reach an agreement on that, and I think we would be speaking for the whole country.

Nicholas Clegg: I would like to add my own expressions of sympathy and condolence to the families and friends of the brave soldiers who lost their lives serving us and the people of Afghanistan in Helmand province: Sergeant Ben Ross, Corporal Sean Binnie, Rifleman Adrian Sheldon, the soldier who died in a hospital in Birmingham yesterday after being shot in Helmand at the weekend, and Corporal Kumar Pun, who it is worth remembering now adds his name to those of the more than 45,000 Gurkha solders who have died serving this country over the years.
	I would like to return to the issue of MPs' expenses. I suspect that many people are a little baffled by all the different proposed solutions, because none of them seems to deal with the biggest loophole of all: MPs making hundreds of thousands of pounds buying and selling properties funded by the taxpayer. Surely the only long-term solution is to get all us MPs out of the property game altogether.

Gordon Brown: I know that this is an issue on which the right hon. Gentleman feels strongly, and it is exactly the kind of issue that the Kelly committee will be looking at. Let him and others put their proposals to the committee and let us come back with a solution. I say to him that any solution that is put forward for the longer term will have to command more than the confidence of this House—it will have to command the confidence of the general public.

Nicholas Clegg: I am grateful to the Prime Minister for his reply, but I still think he is making this a little too complicated. A really simple principle is at stake: we are here to serve our constituents, not to make a fast buck on the property market. That is why I have always thought that we should do what they do in Scotland: simply end—stop—any taxpayer-funded mortgages altogether. Until the new rules are in place, we Liberal Democrat Members have committed ourselves to handing back to the taxpayer every pound of any gain made from the sale of second homes funded by the taxpayer. Will he commit —[Interruption.]

Mr. Speaker: Order. Let the right hon. Gentleman speak.

Nicholas Clegg: Will the Prime Minister at least make that commitment?

Gordon Brown: I hope that people will also speak up for decent, hard-working Members of Parliament who are going about their duty in the ordinary way and who are not trying make any money out of being a Member of Parliament, but simply trying to serve the public. It is very important that we get some context in this debate. Where there are abuses, they must be sorted out. Where there are disagreements about future policy, I agree that recommendations should be made to the committee by MPs and by parties but, as I have said before, I do not believe that we will command the confidence of the public unless people outside this House believe that what we are doing is also right. This cannot be an issue for just Members to make long-term decisions upon.
	As for the right hon. Gentleman's proposal about houses, I know that capital gains tax has to be paid on these second homes. That is the first priority, and the other matters can be dealt with in representations to the committee.

Dari Taylor: My right hon. Friend will want to know that the people of Teesside were very pleased to receive his instant support following the news that the Corus steelworks could be closing. Will he support the campaign that is being led by my hon. and learned Friend the Member for Redcar (Vera Baird) and other Teesside Members to help Corus and enable it to remain a significant part of employment on Teesside?

Gordon Brown: I am grateful to my hon. Friend for raising an issue that the whole House should be concerned about. Corus entered into a contract with four other steel and other manufacturing operators that was supposed to last until 2015. If that contract is broken, a high level of compensation will have to be paid. We are trying urgently to talk to the companies concerned, which range across four different countries, to make the case that it is important to keep the Teesside plant open and that it is counter-productive to close it in the current circumstances, and to see whether, as was previously the case, a buyer, as part of that consortium, is available to take over the plant. These are the issues that we are dealing with. In the meantime, the Minister for the North East of England and Jobcentre Plus are making their services available so that people are in no doubt that if there are to be redundancies, we are there to help people to get new jobs.

Roger Williams: A recent report by the National Housing Federation suggests that more than 100,000 young people will leave the countryside in the next three years, not because they want to do so, but because of the lack of affordable housing. If they stayed, they would be the leaders of their community in the future and the basis of the local economy. This Government have never really understood rural problems, but will the Prime Minister agree to meet a delegation representing young people in the countryside to set out the problems and share some of the solutions?

Gordon Brown: I do not want the hon. Gentleman to go away with the feeling that we have done nothing on this issue; we are determined to help people to get housing and to give help for jobs in rural areas. Indeed, a member of his party was asked to report to us on policies that could be implemented to help people in this position. We will do what we can to help people to get jobs and we are discussing with housing contractors how we can move forward on housing. Some decisions actually relate to planning decisions made by local authorities. We will need the support of local authorities in these areas, but we are determined to do what we can by the rural population of this country.

Helen Southworth: Every year more than 100,000 children go missing in this country. Thankfully, most of them are found safe, but some of them are not. Over the next few days, events will be held all around the country to mark international missing children's day. Will the Prime Minister meet me and members of the leading children's charities to find out not only what is being done to protect those children, but what we need to do further?

Gordon Brown: My hon. Friend is right about the number of children who go missing. Last week we talked about lost children who become part of child trafficking near Heathrow. That is completely unacceptable, and I have asked the Home Secretary and the Secretary of State for Children, Schools and Families to report on that specific instance immediately. In addition, we are working with local authorities to ensure the best care for vulnerable children who are identified by border agencies or at ports, and the immigration and citizenship Bill before Parliament will introduce a new legal duty. The Home Affairs Committee will publish a report tomorrow on some of these issues, and I will be happy to meet my hon. Friend and a delegation after that.

Angela Browning: What is the Prime Minister's response to the further report issued last week by the parliamentary ombudsman as a result of her concern about the Government's failure to action her recommendations on behalf of Equitable Life pensioners?

Gordon Brown: As the hon. Lady knows, we are looking carefully at that report. We have set up an examination by a judge to consider the very matters in the report, and we will report back as soon as he finishes it.

Dennis Skinner: Amid all the gloom this week are two good news stories. One is the minimum wage, which is 10 years old and still going strong. The second is that economic pundits—even the OECD—now concede that the sunny uplands are in sight after the slump. George Soros says that recovery is on its way. He knows all about money and slumps, because he was the man who took £2 billion from underneath the noses of two Tory grandees: Lord Lamont and the Leader of the Opposition.

Gordon Brown: I welcome my hon. Friend back for his first question after his recent illness. Things got really bad while he was away, and we are very pleased that he has come back. He is right about the importance of the minimum wage. We supported it in 1997 and we continue to support it. It has been raised this week and we have made it clear for the first time that tips should not be charged against it. We are determined to keep it, and I hope that all hon. Members will consider voting against the Bill on Friday whose intention is to undermine the minimum wage and kill it off in this country.

Tom Brake: Will the Prime Minister set out what he is able to do in the next critical 48 hours to stop a further massacre taking place in Sri Lanka?

Gordon Brown: The House of Commons will debate the issue later this week. I am calling for three urgent actions, and I am making that clear in conversations with the President of Sri Lanka. Both the LTTE and the Sri Lankan Government must exercise the utmost restraint and avoid civilian casualties. All civilians must be allowed, as I have already requested, to leave the conflict zones, and the UN must have full access to civilians caught up in the conflict. We will play our part through our aid programme. The Foreign Secretary has been in New York to urge the UN to take further action and our special envoy, my right hon. Friend the Member for Kilmarnock and Loudoun (Des Browne), has been in the region meeting partners and building up pressure for a full ceasefire. What is happening in Sri Lanka is having a devastating humanitarian impact, and we will make continuing efforts to avoid civilian casualties, taking whatever action we can to persuade the Sri Lankan Government of the need for restraint and an end to the violence.

Liz Blackman: In the last 18 months, Erewash credit union has saved local people £170,000 that would otherwise have gone to doorstep lenders in high interest rates. That reduces the misery experienced by people trapped in debt and releases extra money into the local economy. As my right hon. Friend knows, the Department for Work and Pensions growth fund backs credit unions. Will he assure me that that fund will remain the highest Government priority?

Gordon Brown: In the Budget we added an extra £18.5 million to help the credit funds. More than 100 credit unions have already benefited from that fund, and more than 150,000 people are being helped. I know that the credit union in my hon. Friend's constituency is a shining example of what is possible, with 700 people obtaining affordable credit. It is making new investment to help people with housing, which is desperately needed in her area. I congratulate her credit union on doing a fantastic job. We want to support credit unions in every part of the country, with both more support and more legislative backing in future.

Robert Key: Please will the Prime Minister tell us whether the Government are in a position to support the long-awaited improvements to the heritage site at Stonehenge and to the roads, as well as the visitor centre that has been anticipated for so long?

Gordon Brown: I am pleased to announce that, in partnership with the Stonehenge programme board, we have been able to identify a suitable and affordable solution for a visitor centre. Stonehenge is one of the world's key heritage sites and the hon. Gentleman is privileged to have it in his constituency. Today's announcement marks the first step towards making the long-held aspirations that he and others have had for Stonehenge a reality. The site will be further enhanced by the closure of the A344, which at present takes traffic very close to the stones. Funding of up to £25 million will be provided through a range of public and private sources. We are determined to help the development of one of the great sites in the world.

Tony Wright: At various times in our history we have had the Long Parliament, the Rump Parliament, the Good Parliament and the Addled Parliament. Does my right hon. Friend agree that if we are not careful we will finish up as the Moat Parliament or the Manure Parliament? Should we not say now that we will accept whatever the Kelly committee says? Will my right hon. Friend say that on behalf of the Government and invite the other party leaders to say it on behalf of their parties, too?

Gordon Brown: As my hon. Friend knows, I have said that I do not think, given what has happened in the past year or two, that the House can proceed on the basis of just Members of the House making a decision without seeking outside support and consulting outside bodies. I hope that we will receive a good report from the Kelly committee and that we and all parties will be able to support it.

Speaker's Statement

Mr. Speaker: Before I proceed with the business of the House, I wish to make a statement about demonstrations in Parliament square and issues of control and access to the House.
	First, let me make it clear to the House that I support the right to demonstrate, but as right hon. and hon. Members have made clear through points of order the recent demonstration by Tamils has caused disruption to the work of the House and to individuals and organisations seeking access to it. It has also involved considerable cost to the House and to the police and exposed many issues of health and safety.
	In the light of those difficulties, and given the distribution of responsibilities for Parliament square between various authorities, I can tell the House that I have arranged a meeting with the Minister for Security, Counter-Terrorism, Crime and Policing, the deputy Mayor of London responsible for policing, the leader of Westminster council and an assistant commissioner of the Metropolitan police to discuss how demonstrations in the square can be better regulated so that the functioning of Parliament is not impeded and the health and safety of individuals is not breached. I shall come back to report any progress that we can make to resolve this highly unsatisfactory situation.

Jeremy Corbyn: On a point of order, Mr. Speaker. I thank you for that statement, and I hope that you will bear in mind during your discussions the pain and suffering that the Tamil people are going through. We must understand their need to express their point of view, in the hope that the British Government and others can encourage a ceasefire in Sri Lanka. These are desperate people shouting out for help, and I think we should listen to them.

Mr. Speaker: I note the points that hon. Gentleman makes. He has always been consistent regarding this matter.

Brian Binley: Further to that point of order, Mr. Speaker. Is it right that a Member should use your statement to further a political cause? Would you argue that that is not what your statement was about?

Mr. Speaker: I have known the hon. Member for Islington, North (Jeremy Corbyn) for many years. He made his comment through a point of order in good faith, and I think we should leave it that.

Christopher Chope: Please can you, Mr. Speaker, tell us the date of the meeting that you have convened?

Mr. Speaker: Today, at 5 o'clock. How's that?

Simon Hughes: On a point of order, Mr. Speaker. My point has to do with the meeting and the demonstration. Like you, many of us have had considerable involvement with the demonstration. Would you be willing to accept a short note from any colleagues who have had some professional involvement with the police and others with regard to the events of the past few weeks? We want to assist you, and to make sure that the resolution of the matter commands the consensus of the whole House, irrespective of hon. Members' individual views on the demonstration and the issue involved.

Mr. Speaker: I am always happy to receive representations from all hon. Members throughout the House. Thank you.

Mike Gapes: On a point of order, Mr. Speaker. We have focused today on events with regard to Sri Lanka and the Tamil demonstrators, but over recent years there have been a number of demonstrations of different kinds. We need to bear it in mind that London is a global city, and that we cannot have its centre and our Parliament regularly disrupted by any organisation whatever.

Mr. Speaker: I note the hon. Gentleman's point of view.

Andrew Dismore: On a point of order, Mr. Speaker. The Joint Committee on Human Rights produced a report on policing and protest a few weeks ago, and one of our recommendations was that there should be no surprises, either from demonstrators or in the policing of demonstrations. We also stressed the importance of dialogue between police and demonstrators. In the light of that, would you consider inviting organisers of the Tamil protest to meet the people whom you are seeing later today, to discuss terms of reference for the demonstration?

Mr. Speaker: I am meeting the people with responsibility in this matter, but who they write to is up to them. Let me make it clear: as I said in my statement, I believe that it is part of the democracy that we live in that people are entitled to demonstrate around Parliament, and therefore in Parliament square. However, what we have out there at the moment is a blocking-off of the right of others to demonstrate, and that is a deep concern to me. The square is an absolute shambles, and that should be taken into consideration as well.

Several hon. Members: rose —

Mr. Speaker: Order. I will not be holding court on the statement that I have made. The statement was clear and the meeting is at 5 o'clock, so I think that we should move on.

BILL PRESENTED

School Bus (safety) Bill

Mr. Speaker: Order. Before I call the right hon. Member for Gordon (Malcolm Bruce) to present his Bill, I draw the House's attention to the fact that the Bill's long title was printed incorrectly in the Order Paper. A revised page of the Order Paper with the correct long title has been issued.
	 Presentation and First Reading (Standing Order No. 57)
	Malcolm Bruce, supported by Miss Anne Begg, Mr. David Blunkett, Peter Bottomley, Mark Pritchard, Willie Rennie and Sir Robert Smith, presented a Bill to make requirements relating to the design and operation of school buses; to make provision about road safety training for drivers and users of school buses; to establish a School Bus Safety Council; and for connected purposes.
	 Bill read the First time; to be read a Second time on Friday 16 October, and to be printed (Bill 95).

Goalpost Safety

Motion for leave to introduce a Bill (Standing Order No. 23)

Brooks Newmark: I beg to move,
	That leave be given to bring in a Bill to make provision for minimum standards for football goalposts.
	Eighteen years ago, an 11-year-old boy from my constituency, Jonathan Smith, was killed during an away game of the Witham under-12s. Jonathan was swinging from the crossbar when the goalpost fell on him, ruptured his heart and left his family devastated. Since his death, Jonathan's mother, Brenda Smith, who is here today watching the presentation of this Bill, has fought a tireless campaign to improve the safety of goalposts.
	I pay tribute to the hon. Member for Waveney (Mr. Blizzard), who secured a debate on this important subject in Westminster Hall in January 2000. Nine years on, however, there is still no legislation to improve goalpost safety standards.
	The beautiful game has a devoted following in all parts of the House. Many of us, including, I am sure, the Secretary of State for Culture, Media and Sport, are wary of imposing new rules, regulations or requirements on the game, its clubs, supporters or amateur players, but my Bill is not an example of health and safety gone mad. I am not talking about professional football, or families having a kickabout in their back yard, and I am not out to ruin anyone's fun. As a passionate Newcastle United fan and father of five, I do not need to be told how important football is to young people. I know only too well that millions of people regularly enjoy playing football, and we need to encourage them to do so, but we also need appropriate legislation to help to keep them safe.
	It is true that some progress has already been made. We now have a good British Standards Institution standard, an up-and-running scheme to replace unsafe goalposts, some growing publicity, and letters of support for Brenda Smith from Her Majesty the Queen, sports personalities and the Football Association, among others.
	In 2005, a new BSI standard was introduced. The Football Foundation says that
	"the standard is good, the standard is solid".
	Nevertheless, manufacturers and buyers are only recommended to comply with it. In addition, the FA distributed more than 1 million leaflets to help clubs, schools and councils to understand better the risks posed by unsafe goalposts and how safety measures should be applied practice.
	The Football Foundation operates an excellent scheme, which allows any FA-affiliated club, local authority, school, community group or club in the national league system step 7 and below to apply for a 50 per cent. grant to replace any of their goalposts that do not adhere to the recognised BSI standard. However, my Bill seeks to go a step further, by making the replacement of any goalposts that do not meet the BSI standard mandatory by 2012. That will include goalposts used on property owned by councils, schools and clubs.
	The Bill will target in particular goalposts made before 1996—the year in which British standards were first produced for goalposts. Despite the introduction of those standards, the FA says that some schools still use, for example, wooden goalposts, which are not illegal, but which do pose a threat to the children using them. Other unsafe goalposts include those that are corroded, rusted or free-standing, or those with metal cuphooks on the posts of crossbars.
	In 2005, the FA identified approximately 15,000 goalposts that did not meet the BSI standard. The Football Foundation has, to date, offered 3,192 grants with a value of nearly £2 million. As the grants can be offered for multiple goalposts, they have enabled about one third of the unsafe goalposts identified to be replaced. That is an admirable achievement, but more can be done.
	I admit that I was surprised when I first became aware of the risk posed by unsafe goalposts. Since Jonathan's death in 1991, at least 10 other children in the UK and many others worldwide have been killed by falling goalposts. Even more have been injured, suffering broken limbs, bruising and fractured skulls, often leaving permanent damage and disfiguring scars. Adults, too, have also been injured in the same way: I recently heard from the parents of another constituent who, 10 years ago, when she was in her mid-20s, had an unsecured goalpost land on her, causing severe injuries for which she is receiving treatment to this day. I am sure that other hon. Members have similar stories.
	The Football Association says that one of the biggest problems is when children swing on goalposts, and I suppose that one answer is to admit that it is difficult to stop children wanting to play on goalposts. Nevertheless, we can minimise the risk as far as possible by ensuring that goalposts are fit for purpose, properly installed and well maintained.
	The goalpost that killed my constituent's son, Jonathan, was simply made of scaffold poles welded together, weighing 200 lb, that were not fixed to the ground. Jonathan was playing in a game for under-12s, who weigh perhaps 60 or 70 lb; they would not have been at risk if purpose-built, lightweight plastic or aluminium goalposts had been in use. Installation and maintenance is as important as manufacture; indeed, the current Football Foundation scheme insists on professional installation and offers training in proper maintenance techniques. Local authorities already have to organise an independent annual check on the conditions of their own pitches. I believe it would be a simple matter to ensure that the safety of the goalposts was also checked at this time.
	The Government have argued that enough has already been done and that a voluntary code will suffice. In a letter sent to my constituent, Brenda Smith, in September last year, the Department for Culture, Media and Sport said that the Government still
	"do not have any current plans to introduce legislation covering this area".
	I agree that support, guidelines and recommendations are a major step forward in creating good practice, but we can do more to ensure that no other family has to mourn losing a child who should have been celebrating winning a football game.
	Other countries have taken more robust action on this issue. The New South Wales Government in Australia passed legislation prohibiting the manufacture of goalposts that did not meet strict criteria. This guarantees that goalposts cannot fall or tip over, and that they are of a limited weight and force.
	I never imagined that I would suggest to the House that France is a country that has anything to teach us about the beautiful game, but the French have legislated for a safety standard that makes the manufacture, distribution or use of non-standard goalposts illegal. I am sure that when it comes to goalpost safety, even my hon. Friend the Member for Stone (Mr. Cash) would not object to our following the French lead.
	Given the simple and accessible scheme already in operation, 2012 is a realistic target. The year of the London Olympics is also an important symbolic target, proving that we have a commitment to grass-roots sports and that we care as much for safety as for success. That would be a great British Olympic legacy.
	The Football Association says it has
	"done as much as possible internally and externally",
	while the hon. Member for Vauxhall (Kate Hoey), a supporter of this Bill and a previous sports Minister, said that pushing for legislation on goalpost safety was "obviously a longer-term solution". Well, it is now 18 years since Brenda Smith lost her son—and that is not just the long term, but a whole lifetime. I hope that I will receive the support of all hon. Members for this Bill to place our children at the heart of a culture of safety and awareness, and to make minimum safety standards for goalposts mandatory by 2012. I commend it to the House.
	 Question put and agreed to.
	 Ordered,
	That Mr. Brooks Newmark, Mr. Don Foster, Rob Marris, Mr. John Grogan, Mr. David Anderson, Kate Hoey, Mr. Simon Burns, Alistair Burt, Mr. John Randall, Mr. Mark Field, Mr. Nigel Evans and Stuart Hosie present the Bill.
	Mr. Brooks Newmark accordingly presented the Bill.
	 Bill read the First time; to be read a Second time on Friday 16 October and to be printed (Bill 961).

Finance Bill

(Clauses 7, 8, 9, 11, 14, 16, 20 and 92)
	 Further considered in Committee (Progress reported, 12 May)

[Sir Alan Haselhurst  in the Chair]

Rob Marris: On a point of order, Sir Alan. I seek your guidance. Yesterday in Committee, it appeared to more than one Member, including me, that a Member was simply reading from a handheld device, such as a BlackBerry, to make an intervention. Is that in order?

Alan Haselhurst: The hon. Gentleman was perhaps more observant than the occupant of the Chair, as it is clear that such a practice is not permitted under the ruling originally given by Mr. Speaker on the use of personal digital assistants in the Chamber. In interventions in particular, and even in a wider sense, reading from either mechanical means or paper should be practised as little as possible if the spirit of "Erskine May" is to survive.

Rob Marris: Further to that point of order, Sir Alan. May I assist you? My recollection is that the Member concerned was not in your line of sight or that of whoever was in the Chair at the time.

The Chairman: I say to the hon. Gentleman that the line of sight of other Members is more varied than is possible from the Chair. The matter could have been raised as a point of order at the time, but I suppose it is better late than never. I thank the hon. Gentleman.

Clause 92
	 — 
	Duties of senior accounting officers of large companies

Mark Hoban: I beg to move amendment 4, page 45, line 18, after 'after', insert 'the first anniversary of'.
	The amendment refers to clause 92, which imposes additional duties on senior accounting officers of large companies. The Financial Secretary can be assured that schedule 46 will be discussed in some detail in Committee upstairs, because it raises issues that need to be explored properly. From time to time, we have been complimentary to the Government when they have consulted on legislation: we recognised their efforts in consulting businesses on the taxation of foreign profits, and, after a somewhat tortuous process, the outcome of that consultation was satisfactory.
	The apparent absence of consultation was one of the criticisms of clause 92. No one, whether from the industry or an adviser, has come forward to say that they were consulted. The clause has therefore come as a surprise to a large number of people. There is considerable concern among advisers and the industry about what the clause means in practice. The heart of the amendment applies to accounting periods beginning immediately after the Bill receives Royal Assent, because businesses seeking to comply with the proposal have a very short period to understand its purpose and the additional burdens and costs imposed on them, and they seek guidance. The purpose of my amendment is therefore to delay the implementation by a year to give the Government, Her Majesty's Revenue and Customs, businesses and their advisers time to understand the implications, costs and benefits.

Geoffrey Robinson: I am following the logic of the hon. Gentleman's amendment, which is reasoned and, on the whole, has much to be said for it. If one starts to consult before putting proposals in a Bill, however, it is almost impossible to get anything down before it is publicised and various wrecking attacks are made on it. Will he please believe in the good faith of the Government in getting the proposal out there and committing themselves to the consultation that is vital to make it a success, and in which he and his party have a role?

Mark Hoban: The hon. Gentleman makes an important point, but as we discussed in yesterday's debate on corporation tax, businesses are angry and frustrated about the lack of consultation before measures are announced, and that is one of the factors that makes Britain a difficult place in which to do business. They want a predictable, certain tax system, in which matters are clearly flagged, and they want more consultation, before legislation is introduced rather than after. From the direction of travel of HMRC, businesses had no sense that the measure was likely to be included in the Bill.

Geoffrey Robinson: I accept that there must be consultation before the legislation is introduced, and that will be the intention, so I am sympathetic to the hon. Gentleman's point. But believe me, the best way to get the proposal through in the end is to get something down on which we then consult.

Mark Hoban: I do not agree with the hon. Gentleman. Consultation should have taken place before the Bill was introduced, but now we have the Bill, we need to consider what to do with it. The thrust of my amendment is that we need to get the proposals right, and we need time to do so. If senior accounting officers are to sign off on whether they have appropriate systems of tax accounting for financial periods starting effectively from when the Bill is passed, they will need guidance. They will need to comply for the whole year, and they will have only a matter of weeks before they must know what is meant by the proposal. I would be pleased if the Financial Secretary followed my amendment and decided to defer implementation by a year. That would achieve the objective of the hon. Member for Coventry, North-West (Mr. Robinson) in getting consultation, it would achieve what I would like, and it would give industry and advisers time to make it work properly.
	My biggest concerns are about the Bill's unintended consequences, its impact on our economy's competitiveness, and the costs that will be incurred. The regulatory impact assessment flagged up big concerns about the impact of the Bill, and it reminded me of the impact that the passing of the Sarbanes-Oxley legislation in the States had on American businesses, and of its benefit to London's competitiveness. I have always joked that a statue should be erected in the City of London, first to reflect the contribution of Messrs. Sarbanes and Oxley to the success of the City, and secondly, as a reminder that hastily introduced, ill-thought-through legislation can be damaging.

Robert Syms: The clause seems to muddy the water as to auditors' responsibilities and board responsibilities. It does not say whether the senior accounting officer has to be resident or non-resident. It would be better if we debated such issues before the provision is implemented.

Mark Hoban: My hon. Friend is absolutely right. We have talked about large companies, and there is also the issue of limited liability partnerships. We think private companies are included as well as public companies. It is not clear who the senior accounting officer should be. Should it be the finance director, or the director of tax? What happens if the parent company is overseas and it has a very flat structure, with lots of operating companies in this country? Does each one have to complete a certificate? There is a raft of questions to which we do not have answers, yet companies will have to start to comply with the measure within a matter of weeks. That is my concern.
	I ought to make it clear why I tabled the amendment. Its intention is not to probe; I do think that it is important. However, the jury is out on how the measure will affect business, and we are not opposing it outright. We just need to understand what it means, as does business. That is the purpose of the amendment.

Rob Marris: Clause 92 introduces schedule 46, which is for discussion later in Committee, but as the issue of timing causes the hon. Gentleman concern, it is fair to look at that schedule. Paragraph 19 of that schedule provides for regulation-making powers. It would help the Financial Secretary to address the hon. Gentleman's concerns about timing and involvement, which I quite understand, if it were clearer in the Bill what those regulations would be about, and when they might be made.

Mark Hoban: Indeed, and the hon. Gentleman makes an important point about those powers. Perhaps when the Financial Secretary responds, he could say whether he expects draft regulations to have been published by the time we debate schedule 46. It would be helpful if that did happen, because given the nature of the consultation that has taken place to date, we would not feel comfortable passing legislation without having seen a draft of the statutory instruments that will implement the detail of the measure. The issue is not just one of consultation. It is about what the measure means in practice. How far does it go? There are already legislative requirements on companies relating to their accounting systems. There is also HMRC guidance on accounting systems already in place.
	On drawing up a set of statutory accounts, a number of my hon. Friends, and the hon. Member for Coventry, North-West will know from their business background that businesses are required to have in place a set of accounting systems that enable them to draw up financial statements. Companies' financial statements will be audited. Auditors will rely on the systems and controls in place to ensure that the accounts are drawn up on a proper basis. The Companies Acts also confer duties on directors to keep adequate accounting records, and there are penalties if they misfile. There are already obligations on companies to ensure that the tax charge and tax balances figures that appear in their accounts are based on proper accounting systems, so it is not clear how much further the Government are seeking to go in imposing additional duties on senior accounting officers. Again, that is a matter on which we need clarification.
	One of the things that has surprised industry about the measure is that industry felt that it was working very closely with HMRC on risk assessment—on making sure that HMRC understands the risks in business relating to accounting for tax. Industry feels that that process has been much more open than it perhaps was historically. Guidance on tax compliance risk management is now published as an HMRC manual. It makes it clear that systems have become a key issue in moving corporates away from high risk and towards low risk. There has been a pilot scheme involving detailed systems reviews of 10 large corporates, and numerous other systems discussions are going on with large corporates, both within HMRC's large business service and outside that unit in the local compliance large and complex teams.
	A lot of work is already going on in HMRC with large companies so that they understand the risks for businesses in producing accurate assessments of their tax position. Under the Finance Act 2008, HMRC has the absolute right to see statutory records. Also under that Act, there is an obligation on corporate businesses to provide reasonable assistance to HMRC's information technology auditors. There are already significant obligations on companies to work with HMRC, so it is not clear, from a tax angle—let alone from the angle of the normal responsibilities placed on a company through the Companies Acts—what more HMRC is looking for through the powers in the Bill.

Rob Marris: May I try to assist the hon. Gentleman? Of course, I cannot speak for HMRC, but as ever, I can refer to the explanatory notes. Volume 4, paragraph 23 of the explanatory notes refers to clause 92 and schedule 46, and it says:
	"Currently, there is no legal obligation on any particular director or company officer to ensure that the company has appropriate tax accounting arrangements."
	That seems to be the perceived mischief at which clause 92 and schedule 46 are directed. I have to say to the hon. Gentleman that I am surprised that there is currently no such legal obligation.

Mark Hoban: The hon. Gentleman makes a point about enforceability and about which person should be under an obligation, but of course a senior accounting officer will already have to sign off the tax returns when they are filed, a finance director will have to sign off the accounts, which include a calculation of the tax liability, and directors are responsible for maintaining proper accounting records. There may not be a specific obligation relating to tax accounting, but there are already broad responsibilities placed on directors to maintain proper accounting records. HMRC needs to justify why it is going beyond the existing tax and legal obligations on companies to provide proper tax accounting systems. That justification is missing. It is a question of HMRC trying to establish what the benefits and costs are of the enforceability that we are discussing. That is what is missing.
	I was about to comment on personal accountability. The measure imposes a fine of up to £5,000 on senior accounting officers for non-compliance. I suspect that any senior accounting officer would seek indemnity from their company, and would also look to their auditors. It is a slightly odd situation; the accounting officer will provide the certificate to the auditors, but he will also look to the auditors for compliance.
	There is an important point to make on the issue of materiality. I know from my experience as an auditor that one works to a "true and fair view". There is a concept of audit materiality in that, and it depends on the company to say where that threshold of materiality applies. It is not clear where it applies in the case that we are considering. Clearly, the fact that the Government introduced the proposal suggests that the level of materiality in company accounts is not sufficient: otherwise, they would not have needed to include the clause. They would have been content for the matter to rest where it is. I am not sure whether the Government are clear about where they believe that materiality should be. How much inaccuracy would HMRC be prepared to tolerate in the preparation of tax accounts?

Robert Syms: There is a real problem, because although only one fine can be levied per year, one presumes that if there was a problem with tax records going back several years, there would be multiple fines. Some poor fellow could retire, and be sitting in Sandbanks in Poole, and get a knock on the door one day. Let us say that, on his watch, there was a problem with record-keeping in a particular company for four or five years; that person could be asked for £20,000 or £25,000. We need more information, because such a situation would very much go against the grain of limited liability, and the liability of boards.

Mark Hoban: My hon. Friend makes an important point. We will tease out the detail of the measure in Committee—whether it is retrospective, for what period people will be liable, and so on.
	On the issue of materiality, let me put a scenario to the Financial Secretary. I do not know what his experience was after the VAT cut in the pre-Budget report. I remember doing a bit of Christmas shopping and being surprised at the number of shops which, rather than calculating the impact of the VAT cut at the till, relied upon the assistant at the till to do a manual calculation on his or her calculator. I hope that in most cases that calculation was correct— [Interruption.] The hon. Member for Wolverhampton, South-West (Rob Marris) asks whether I checked. Despite the fact that I am a chartered accountant, and although I sit at annual general meetings and check that the accounts add up, in the anal way that accountants have, I did not crosscheck the calculations. What I did check, though, was that the VAT cut was calculated not as 2.5 per cent. of 100 per cent., but as 2.5 per cent. of 117.5 per cent. That bit was okay.
	Would the senior accounting officer of, say, John Lewis—come to think of it, John Lewis is a partnership, and I do not know whether partnerships are in or out of the proposed regime, but it is a large business—be accountable for somebody at the till making such a manual calculation on a calculator? I think John Lewis programmed its tills properly, so perhaps that is an unfair example. Any big retailer that did not have time to programme its systems after something unexpected happened, such as the VAT cut, would be dependent upon somebody with a calculator to calculate the reduction at the till. Is that material or immaterial? To my mind it is immaterial. If there was a systemic problem in calculating the VAT cut, I suspect that that might be moving towards material, but we need some guidance on materiality.
	I know that materiality is a difficult issue for many organisations, particularly regulators, to deal with. If the regime is to work in a way that will reduce the cost burden on business and maximise the value, industry needs some guidance on what is material from HMRC's perspective, if HMRC is not prepared to rely on the concept of materiality used in the audit of statutory accounts.

Rob Marris: The senior accounting officer's responsibility is to take reasonable steps. We would not have a big discussion on that, although I, as a lawyer, have some idea what that means. Although I understand the hon. Gentleman's concerns, it has certainly been found in the field of health and safety, which is my specialist background, that if a particular director is nominated as responsible for safety—not for every incident on the shop floor, but to assume overall responsibility for taking reasonable steps to make sure that there are safe systems and so on—safety improves. I expect the Government's approach is similar in respect of tax accounting.

Mark Hoban: That is fine, but there is already an obligation on directors to maintain proper books of records. They already have to sign off the accounts. If there was no responsibility anywhere in the business for signing off the books and records or for signing off the accounts, that would be a valid point. That is probably why it is in the Companies Act already. But we are going beyond the existing requirements, to create a new obligation on senior accounting officers, and I query the need for that move, given all the checks and balances that are in place already through the directors' statutory duties, the audit and the work that HMRC is doing with large corporates on risk management. What is the rationale for going that much further, given all the existing legal responsibilities?

Rob Marris: I am grateful to the hon. Gentleman for his generosity in giving way. There is almost a clash of backgrounds here, but I think it is helpful. In the safety field, similarly, there is a panoply of legislation going back to the Factories Acts, the Factories Act 1961, the Health and Safety at Work etc. Act 1974 and so on, and the law of negligence stemming from the seminal case of Donoghue  v. Stevenson in the 1930s. Having a nominated director seems to focus the mind of the organisation, even though there is that legislative background and all those duties exist. I suspect the Government's approach may be that similar focusing is needed in some companies—a minority—regarding tax accounting.

Mark Hoban: I am still not persuaded. That is why I look forward to the Financial Secretary's reply, in which I hope he will lay out explicitly, for the first time in public, what the rationale is for the measure. On Second Reading there was not much reference to it.

Geoffrey Robinson: Behind the measure lies the particular role that the chief financial officer plays in a company. He is the ultimate point of accountability. That is why, in all the companies with which I have been involved, small ones and some comparatively large ones, the chief financial officer has always had the right of appealing direct to the board as a whole, quite apart from the chairman, and to the chairman, but separate from the executive officer. The provision is, in a sense, an extension of the very particular position that the chief financial officer has in relation to an extremely sensitive issue. The Bill is trying to take that a little further by imposing a sanction—which will no doubt be covered by an indemnity—so that the responsibility is registered personally, as all financial matters are and as the hon. Gentleman rightly says, and directly with the financial officer.

Mark Hoban: The hon. Gentleman and his hon. Friend the Member for Wolverhampton, South-West are trying valiantly to justify the measure, but I am not persuaded. There are already checks and balances in place to ensure that. If there was feedback from HMRC's risk assessment that directors were not taking their responsibilities seriously and that there were big gaps in risk, that would be an issue. I also question whether HMRC is concerned that there are material issues with tax compliance. I would expect that to be picked up by auditors and appropriate adjustments to be made.

Geoffrey Robinson: A good example of where finance directors can get leant on, I suppose—with no insidious implication—would be some of the big banks, such as Royal Bank of Scotland, where even the non-executive directors had nothing to say as liabilities racked up. I wonder where the finance accounting officer was in that. It is another aspect of his position, not directly related to tax, but it is clear why singling out one aspect—in this case, tax—and giving it a special focus could have a bearing and give him a reinforced position on the board.

Mark Hoban: I have great deal of respect for the hon. Gentleman's business experience. He comes to the House with some knowledge of large companies, but I am not yet persuaded. The case has not been made. It goes back to the point that I made at the start, which he and I first tussled with, about the lack of consultation. The Government have not gone out there in advance of the Bill to make the case for the requirement. If the case was made, we might well change our minds. That is why time is needed to sort out the issue and nail down exactly why it is needed and what the consequences are.

Robert Syms: Presumably the penalty is levied directly by HMRC on the company without recourse to courts—I see nothing that involves courts or appeals—and presumably the company gives the name of a senior accounting officer. Do the tax authorities have to accept a particular name? Some people have a certain reputation with the tax authorities—they may call it battle honours. Clearly, somebody who had had quite a few penalties levied against them might not be the most popular person for the Revenue to deal with. There are many issues here, and I am not sure the Government have explained them fully.

Mark Hoban: My hon. Friend makes an important point. That is part of the challenge. The case has not been made, which is why people outside are perplexed about the need for the measure.
	I have touched on materiality and talked about normal accounting systems. "Tax accounting arrangements" is a vague term. Is it simply the processes? Is it the technology or the people involved? What does "appropriate" mean? These are details that we need to take into account.
	The measure's impact assessment raises some questions. The Government say:
	"We forecast an improvement in Exchequer receipts of £140 million over 4 years."
	So it would be quite helpful—perhaps before we reach schedule 46—if the Government were to produce an estimate of how the forecast was reached and what they expect to emerge as a consequence of their focusing responsibility on an individual.
	The impact assessment also highlights the Sarbanes-Oxley Act, which I touched on earlier. The assessment says:
	"This measure draws on the US 2002 Sarbanes-Oxley Act which put obligations on senior officers of US corporations to certify amongst other things that: they have established and are monitoring certain internal controls, and they have disclosed any material weaknesses in those controls to the company auditors."
	That rang alarm bells in my mind, because the Act had a big impact on business in the United States and created some concern about whether the mooted takeover of the London stock exchange by the New York stock exchange would introduce extra-territorial regulation—whether Sarbanes-Oxley would apply here in the UK.
	The issue reminded me of a debate that I had with the current Secretary of State for Children, Schools and Families when he was the Economic Secretary to the Treasury. On that occasion, we debated the Investment, Exchanges and Clearings Houses Bill, which was introduced as an attempt to avoid imposing extra-territoriality on UK businesses, triggered by concerns about the impact of Sarbanes-Oxley. I am therefore rather surprised that the Government have used that legislation to back up this measure, because, at the time, the right hon. Gentleman, referring to a conversation with Christopher Cox, the then chairman of the US Securities and Exchange Commission, and Hank Paulson, the then US Treasury Secretary, said:
	"I think that they both share my analysis of the current dangers of the Sarbanes-Oxley regime, which is that the way in which it has been implemented is both burdensome and insufficiently risk-based and that therefore it does not achieve the initial intention."—[ Official Report, 28 November 2006; Vol. 453, c. 1039.]
	I should have thought that somebody in the Treasury might have remembered that exchange when drawing up the regulatory impact assessment, because they then could have said that perhaps Sarbanes-Oxley was not the best precedent to cite. Indeed, I should have thought that the Chancellor might have remembered the precedent, because, in a 2007 speech to the Institute of Chartered Accountants, he discussed the reforms that were being introduced in the UK and compared them with the US, saying:
	"During a visit to the US last year, I was struck by the extent to which the approach taken by Sarbanes-Oxley—overly burdensome and prescriptive rules—was now seen as the wrong response."
	I do not know whether the Financial Secretary shared the contents of the impact assessment with the Chancellor. If so, the Chancellor might then have remembered that he was quite sceptical about the benefits of Sarbanes-Oxley and the prescriptive rules that it imposed.
	Of course, the issue goes right to the top, because even the Prime Minister recognised the implications. He said:
	"I was under the same pressure as US legislators to impose blanket proscriptions such as Sarbanes-Oxley. I resisted"—
	a great dividing line in politics, there—
	"in favour of maintaining a flexible principles-based approach. We will allow nothing to undermine that commitment."
	The Government have argued before that measures inspired by Sarbanes-Oxley are overly burdensome and prescriptive, but the measure before us rings alarm bells: the Treasury has not learned the mistakes of Sarbanes-Oxley and seeks to impose its rules and approach to tax accounting. Interestingly, Deloitte and Touche, when commenting on Sarbanes-Oxley, also queries its relevance, saying that it is
	"questionable how relevant the Sarbanes-Oxley experience should be here as the US legislation was developed specifically in relation to financial reporting and so arguably does not extend to tax return preparation process."
	Sarbanes-Oxley led to the significant deterioration in the relative competitiveness of the US when compared with other jurisdictions, but the Bill's regulatory impact assessment says that
	"it"—
	the measure—
	"has no impact on competition"
	and costs are "negligible". The Government could not have reached that conclusion without having consulted industry first, but they did not, so they are not in a good position to make that statement.
	Again, we return to the issue of consultation. The Government must understand the true cost to business. I am sure that Messrs. Sarbanes and Oxley, at the time of their Bill's passage through Congress, said, "Oh, don't worry, it will have no impact upon competition, it won't involve additional costs on business"; that they were quite breezy about it, in the same way that the Financial Secretary is quite breezy about it in the impact assessment that he has signed off; and that, only when it was too late, did they realise that it had a cost and an impact on the US's competitive position. I just counsel caution.
	The Treasury has rather rushed into the initiative, and it is not clear who its author is. I do not get the impression that HMRC has embraced it as warmly as it would if the initiative had been one of its own; and I do not know whether it was a follow-up to the G20 summit, whereby someone said, "Something must be done," or a response to the TUC's campaign on the tax gap—a political, knee-jerk reaction in the same way that Sarbanes-Oxley was to problems in the United States. It is not clear who is the father of this great idea.

Stewart Hosie: Before the hon. Gentleman probes the genesis of the measure, I note that he talked about the costs for competitiveness. However, there are real costs, too. Schedule 46 describes accounting arrangements, including arrangements for keeping accounting records, and many businesses will simply assume that that means that they need to get the most up-to-date and expensive enterprise accounting system. The hon. Gentleman will know that the real cost of delivering that—in monetary terms, consultancy fees and management time—can be quite enormous.

Mark Hoban: The measure could be expensive, and that is part of the problem. No one knows quite how expensive it will be, because no one knows the detail of a measure that was published without consultation. We would have had a better idea of the cost if someone had bothered to ask business beforehand, rather than just slapping it into a Finance Bill as a cracking idea that might get a few cheers from Back Benchers, trade unions—whoever it was targeted at—and saying, "We'll just finesse the detail later." That is not good enough, given the issues that this country already faces about the competitiveness of its tax regime, predictability, stability and certainty.
	I am bemused by the clause, as are professional advisers and business. I am not even sure that we have a clear justification from the tax people. I talked about systems and materiality, and there are more than 20 taxes that could affect business. Does the clause apply to the accounting for each tax? Is it simply restricted to corporation tax, VAT, pay-as-you-earn and national insurance—the mainstream taxes? Or will business have to look at other taxes, too? I have not even discussed its impact on UK subsidiaries of overseas businesses or how somebody in the UK will get comfort on overseas subsidiaries, because the issue goes back to materiality.

Geoffrey Robinson: rose—

Mark Hoban: The hon. Gentleman looks like he is about to make a point, but I know from my experience of working with multinationals that an organisation's control over, and knowledge of what is happening with, small overseas subsidiaries can be quite limited. It is down to risk and judgment.

Geoffrey Robinson: The hon. Gentleman asks who fathered the provision; I think that it probably has many fathers. In parts of, for example, Barclays, it seems that no one, including the finance director, knew what was going on, particularly in the separate overseas companies, many of which were seemingly set up for tax purposes. I do not know whether the Government intend to tackle that, but there is a real problem in making a chief finance officer sign off responsibility for the whole company. I understand from my right hon. Friend the Financial Secretary that we are targeting the very biggest companies. If it is the intention to make the chief finance officer responsible for what happens in all a company's operations, although it is necessary, we must think carefully about what we are doing.

Mark Hoban: The hon. Gentleman makes an important point about whom we are targeting and the level of control. I remember that the changes that corporate governance control measures introduced got people to examine some of their businesses in more detail. I am conscious of his point about the very largest companies, but I am not sure whether we are considering only those companies. The regulatory impact assessment states:
	"Turnover—more than £22.8 million
	Balance sheet total—more than £11.4 million
	Employees total—more than 250".
	What constitutes "large" for the Government is therefore relatively small.

Stephen Timms: My hon. Friend the Member for Coventry, North-West (Mr. Robinson) drew on a brief conversation that we had earlier. I will say something specifically about the point that the hon. Member for Fareham (Mr. Hoban) raises, and about narrowing the scope of the provision when I catch the Chairman's eye.

Mark Hoban: I am pleased that we seem to have forced a concession from the Financial Secretary. Again, it illustrates the point about ill-thought-through measures and lack of consultation. If the Government had thought matters through properly, the regulatory impact assessment would be better defined than it was when the Financial Secretary signed it off on 20 April. If he is already seeking to narrow the scope, is it a sign that things are coming apart? It demonstrates the weakness of the approach of rushing into something and having to unravel it afterwards.
	We had the same experience in last year's Finance Bill on the treatment of residence and domicile. The relevant provision was delayed till the end of consideration of the Bill to cope with a raft of further amendments on Report. We were assured that it was the last legislation on the matter, yet—lo and behold—this year's Finance Bill includes more provisions on residence and domicile as a consequence of lack of consultation. I therefore believe that the Government are starting to retreat from their initial position as on 20 April.

Stewart Hosie: Let me reinforce the point that the hon. Member for Coventry, North-West (Mr. Robinson) made. I was with one public limited company, which had 140 units in the UK and one overseas, for five years. It would have been extraordinary if the finance director had been expected to spend half his time examining 139 units and the other half looking at one unit, simply to understand the one overseas operation.

Mark Hoban: In a way, that goes back to risk and materiality.  [Interruption. ] The hon. Member for Wolverhampton, South-West said from a sedentary position, "The Bermudan subsidiary." That is not a reflection on the company for which the hon. Member for Dundee, East (Stewart Hosie) worked. It is interesting to ascertain what constitutes the gap that we are considering. Is it simply straightforward accounting for day-to-day transactions and the normal run of business, or are we looking at a layer of tax planning above day-to-day transactions? Are the Government targeting the latter? I am sure that any attached risks will emerge from HMRC's risk analysis procedures.
	I have spoken for longer than I intended. I thought that I would make a brief contribution to the debate, but hon. Members have made many useful comments about how the provision will work in practice.
	I end with a quote from the Institute of Chartered Accountants, which helps summarise the position. It says of clause 92:
	"This proposed new requirement appears to impose further onerous obligations whilst adding nothing new in terms of tax compliance. The proposed measure is disproportionate because it applies a potentially onerous personal liability on all the senior accounting officers ab initio. HMRC's risk analysis procedures should identify the small number of large companies that do not have adequate accounting systems to prepare a correct and complete return. Rather than introduce this measure, if HMRC is concerned about internal accounting systems it would make more sense to extend the existing declaration that is required on the corporation tax return."
	That is a balanced criticism of the provision, which has been hastily introduced with inadequate consultation. There are many grey areas, yet companies will be required to comply with it from an accounting period that starts the day after the Bill receives Royal Assent, without sight of draft secondary legislation. In the interests of maintaining industry's confidence in HMRC and ensuring that HMRC knows what it is doing, the reason for doing it and what the costs and benefits are, we should delay implementation until the first anniversary of the Bill's passage.

Geoffrey Robinson: I want briefly to take up a few points in the light of that discussion. I shall start from the same point as the Conservative spokesman. Clearly, there must be a great deal of consultation on this provision, and it should not be implemented until the consultation has ironed out the bulk of the problems that are bound to be associated with it. However, I put it to the hon. Member for Fareham (Mr. Hoban) that if we consulted in detail on legislation like this before including it in a Bill, we would never get the Bill, because of the attitude of those who, understandably, do not want any form of additional regulation, bureaucratic control or paperwork, or any of the costs that the hon. Member for Dundee, East (Stewart Hosie) identified. We would never get there, so it is much more sensible to produce something first. HMRC is in touch with all companies' accounting officers. It knows what it is after, and the companies do, too—and that knowledge is built into what is before us. It is not as though the provision had been plucked out of the air—although it may sometimes suit the Opposition to suggest that that is the case.
	The time to deal with the detail will be when the Bill goes into Committee upstairs. The companies meet HMRC in between the Committee sittings—that is how it always happens—and I am sure that the Government will be open to amendment, where appropriate. The hon. Member for Fareham makes a good case for consultation, which does happen, but he gets it the wrong way round if he thinks that we could have such detailed consultation before including anything in the Bill.
	However, I think that a year's delay would be sensible, if there were agreement on that—but whether the Government would go that far, I do not know.

Mark Hoban: Join us in the Lobby.

Geoffrey Robinson: There is no question of that. If the hon. Gentleman ever had to work with HMRC and companies—a remote possibility—I would urge him not to believe that he can undertake meaningful consultation before first producing something in a Finance Bill.

Rob Marris: Does my hon. Friend share my concern that in the body politic in the United Kingdom, we—this applies to all parties—have developed a regrettable tendency, which is that although we all say that discussion and debate are good, when someone changes their mind as a result of that debate, we claim that they are performing a U-turn, and that that change of mind proves that the original measure was ill thought out or rushed? That is regrettable, because that is what we do in this place: we share ideas here and discuss them, and occasionally people change their minds. That is an honourable thing to do.

Geoffrey Robinson: Indeed, it is not just honourable; it is the correct way to proceed. I used to start debates in Committee by saying, "Look, this is for discussion and we are looking to get it right." If a point then came when the Minister made a sensible compromise or came to an agreement—not that that would necessarily happen, because in those days the Opposition had often not even tabled an amendment for the first sitting—we would hear, "The Government are collapsing! A huge concession! Holes knocked in the legislation!" That is not what Committee is about. I never had a problem with reaching for amendments, if that was the right thing to do—that is the whole purpose of the process—providing, of course, that they did not vitiate the essence or the purpose of the Bill. Indeed, if an amendment commends itself to the Minister, it should enhance the Bill.
	I was interested in what the hon. Member for Fareham said about the law that was introduced in the United States in the wake of the Enron and WorldCom scandals, when the United States went in for what we called "heavy regulation", which contrasted with what we over here called "light-touch regulation", which I am sure the hon. Gentleman and the Financial Secretary will remember. I was not in the Treasury at the time, but I knew what was going on. We thought that that difference would give us a huge competitive edge, but it is interesting to see how things turned out.
	That issue was meant to be about financial controls, but what went wrong with the banks was, in large part, to do with the lack of financial controls, albeit in a different sector now. Despite the heavy regulation in the United States, the problem started there—Gillian Tett has shown that clearly in her book "Fool's Gold"—and then it spread, and we are clearly caught up in it. However, that regulation did no good for the sector that was about to blow up in the United States, whereas our light-touch regulation is now being blamed for what happened here.
	What clearly went wrong was that people were not being intelligent about regulation—that is what it comes down to—and neither were the central banks. Although we took away regulation from the Bank of England and gave it to the Financial Services Authority, the Bank still had an overall direct responsibility. I remember Eddie George saying, "I'm afraid of a systemic collapse," which is why he wanted that responsibility, and the money for it. That responsibility was clearly left with the Bank of England when we made that change. It is no good for the Bank to say, "It was all passed over to the FSA." It was not: the integrity of the entire banking system was left clearly with the Bank.
	Everybody was looking at the wrong thing, or not looking hard enough at the right thing. That is what happened in the United States. If we do not focus intelligently on the area that poses a threat to the economy, we will do no good, whatever sort of regulation we have, however many people we have and however many pieces of legislation we have to back it up.

Rob Marris: May I give my hon. Friend an example? The Canadian banking system has been far stronger than the banking systems in the USA or the United Kingdom. However, in Canada, under the Office of the Superintendent of Financial Institutions, there is less regulation. Banking is more heavily regulated in the USA, but the Canadians take a risk-based approach, on the basis that: "We know risk when we smell it and we'll get in there." It is not just a question of regulation; it is a question of philosophy.

Geoffrey Robinson: My hon. Friend is dead right, and I agree with him entirely. The idea of bureaucracy regulating entrepreneurial banks will never be terribly effective.
	To return to clause 92, I am pleased that we are approaching the issue in the way that we are. I am sure that the Government will listen hard to what the industry says, and I am sure that we can get things right. As for why we are focusing on tax as we are, to me that does not pose the sort of problem that it seems to pose for the hon. Member for Fareham. In view of the multiplicity of taxation arrangements burgeoning throughout the world, I can quite understand the position of the United States Government under President Obama and that of the German and French Governments, who have always been strong on this issue, and why we have a particular focus in the UK on strengthening tax function and tax accountability; the words in the Bill speak of all this. It seems inevitable that that should be part of the review that we are having, when so much of the tax take appears to be disappearing overseas. I am not sure that that is directly linked, but I cannot help but feel that it is part of the mentality that has led to this part of the Bill.
	I welcome the provisions. The chief finance office should be clearly seen to have an independent role in accounting to the board. When my right hon. Friend the Financial Secretary puts the Government's case, I wonder whether he could tell us whether it is automatically assumed that the chief finance office will be a board member, because the Bill refers to officers or directors. It is terribly important that the person charged with that responsibility should be a director, not some officer who can escape a sense of personal responsibility. A finance office in a major British multinational or international company will feel a heavy personal commitment and a personal burden, which he will have to bear in the interests of the whole company, with a direct responsibility enshrined in law and a fine attached, related to the performance of that function. If a finance officer were to be fined, in all probability he would seek and obtain an indemnity from the company, and rightly so. Nevertheless, the fact that he has been fined will weigh heavily on him, if he is responsible in the exercise of his duties, and therefore reinforce the general sense of this part of the Bill, and the general purpose for which the Government have introduced it—and I am pleased to see it there.
	I am sure that the Financial Secretary will reassure us on the need for consultation and the other matters that the industry will bring to him in due course. We look forward to hearing what he has to tell us in that respect.

Jeremy Browne: The proposals are far-reaching in their implications and were introduced without meaningful notice or consultation. I have received representations from groups such as the Chartered Institute of Taxation and the Institute of Chartered Accountants in England and Wales, and from companies such as PricewaterhouseCoopers. They have raised a series of concerns with me, as they no doubt have with MPs from all parties, about the potential implications of what we are considering, including what they regard as possibly unforeseen implications. Indeed, the hon. Member for Fareham (Mr. Hoban) read out a quotation from the Institute of Chartered Accountants that summed up those concerns precisely.
	I propose to highlight three concerns that my party and I have about the Government's proposals, and then to suggest how we might deal with them. The first concern is about the aspect of personal liability. All parties in the House would wish to see companies that failed to comply with the law dealt with accordingly, but the Government's proposal makes a distinction between the organisation and the individual. The hon. Member for Poole (Mr. Syms) asked what implications that might have, and whether they might go further than the Government envisaged. It is therefore important to explore the aspect of personal liability in greater depth in Committee.
	Our second concern is about the lack of clear definition. Paragraph 8 of schedule 46 says that only the most recent senior accounting officer will be liable, but there will still be issues if errors have been made in the past. If the most recent senior accounting officer has been in post only for a short period, the provision may not be so satisfactory, whereas if he or she has been in post for a long time, we would be able to go back much further. There is therefore some doubt about how the provision will apply in practice.
	No one knows what HMRC thinks will constitute adequate or accurate reporting systems. One person's idea of adequacy may be markedly different from another person's. Indeed, in accountancy, one person's idea of accuracy may occasionally be different from another person's idea of accuracy. As far as I am aware, no guidelines have been published so far to clarify those points.
	My final point about the lack of definition is about the implications for UK multinationals based primarily in this country—a point that was made earlier. However, I do not think that the following point has been made: what if the senior accounting officer is not based in the United Kingdom, even if most of the company is? How will the law work in practice then?
	The third area of concern that I have identified in gathering together the themes that others have expressed to me relates to the regulatory burden and the costs involved. The rules will be up and running from October, and there is genuine anxiety that this does not provide a fair period for companies to respond and incorporate the new rules into their practices. My understanding is that the Government say that the new arrangements merely formalise the procedure that is often observed by companies, but all the representations that have been made to me by the industry bodies that I have just named suggest that the legislation goes further than that. There are also questions about the cost to business and the anticipated extra yield to the Exchequer, and about whether the additional money raised will be sufficient to justify the potential additional cost to business.
	Those are my concerns, based on my discussions with others. Thinking through these issues as carefully as I can has led me to come up with four brief guiding principles for seeking to address the situation. First, my party believes that we should support measures to improve accountancy procedures in the interest of transparency. Everyone would accept that we want to see companies complying with the law in a transparent way, and not unreasonably trying to avoid their obligations.
	I completely understand the Government's desire to maximise the tax yield within the laws of this country, particularly when we have such an enormous public deficit. The need for the Government to raise money is obvious for all to see. We also recognise, however, that there are many concerns over the wording, the short notice period, the regulatory burden and the personal penalties in schedule 46. It is therefore reasonable to allow this measure to go to Committee, because although the overall objective of greater transparency is reasonable, there will need to be further consideration of those specific points.
	The second point relates directly to the amendment tabled by the hon. Member for Fareham, with which I have a lot of sympathy. It is logical to provide for some breathing space in which the rules can be reviewed, so that companies do not fall foul of them unwittingly. Some concerns have been raised with me, however. First, there could be a tendency for some companies—not those that observe best practice, which are unlikely to fall foul of the rules anyway—to see a year's delay as another year in which they can ignore the problem, and they might not be any better prepared when the legislation comes into force than they would have been if it had taken effect sooner. To be more cynical, one could suggest that other companies could use the year to give themselves more time to think about how to evade the spirit of the law.

Mark Hoban: The hon. Gentleman is making an important point about how people could use the year's delay. He will know from reading the Bill that there are two certificates involved: a type A certificate and a type B certificate. Certificate B is used when a company cannot sign off using certificate A and some explanation is required. One concern that has been expressed is that in the first year many businesses will have to file type B certificates anyway, and give an explanation of why they cannot comply, not because they are being difficult or because their systems are not up to scratch, but because of the short notice period. There is a danger of confusing the picture by rushing this measure in with undue haste, without properly identifying which companies are not compliant and which are.

Jeremy Browne: I completely accept the hon. Gentleman's point, and his honourable intentions. The trade-off that we always have to grapple with on these occasions is that if a measure has some merit—we all accept that there is some merit in the Government's proposals—we have to decide how long to delay introducing it in order to ensure that it will work even more effectively. There is a strong case for saying that the added benefit of having a more workable measure will justify the year's delay in implementation, as the hon. Gentleman's amendment suggests. However, I believe that such a delay would have potential downsides as well as advantages.
	My third point is that I hope the matter will be examined in further detail in Committee. I am sure that the Committee will not seek to remove the clause altogether today, and I hope that I will be able to table amendments in Committee that could reconcile these points, as that might be a more appropriate forum in which to discuss them.
	My final point is a broader matter of principle. Objections have been raised about the so-called concept of naming and shaming. I want to put on record the fact that my party is not against naming and shaming per se—the practice might have a part to play—but we want to ensure that it is those who deliberately evade tax who are treated in that way, rather than those who have made a genuine, and in some cases very small, error. The state should not treat individuals and their reputations in a heavy-handed way. If it puts their names into the public arena in a way that damages their career prospects and other private interests, and subsequently finds that that action has been out of all proportion to the offence—which might have been committed unwittingly as well as being modest in scale—it will have exceeded its power in terms of its relative might and the individual over whom it wields its power. We need to observe that important principle in our deliberations. We need to strike a balance between transparency and effectiveness, and between the rights of the individual and the understandable desire of the Government to collect tax revenue legally owed to them.
	We accept that there is some virtue in the proposals, but they require considerable further attention, and it might not be desirable to bring these matters to a head this afternoon. After we have heard further representations in the House and externally, we should try to come up with proposals in Committee that are more satisfactory to more people who have a direct interest in these matters.

Robert Syms: I declare my interest in today's proceedings on the Finance Bill, as shown in the Register of Members' Interests.
	I agree with the amendment tabled by my hon. Friend the Member for Fareham (Mr. Hoban). His proposal is very sensible, given the speed with which the Government are trying to rush through the measure.
	Although I have a number of questions, I am glad that the Minister has already said that he will tell us House more about the definition of a large company, because that will be useful for our debate. Under the provisions, a company will have to notify Her Majesty's Revenue and Customs of the name of its senior accounting officer. I assume that it will also have to provide the company's address, but will it have to provide all the company's addresses for which the officer is responsible? Will he or she have to give their home address, as they will have some personal responsibility for what is discharged? Will the individual in question have to be resident—could they be a non-dom? These are important questions. HMRC does not require people to have DNA tests, but you never know.
	We have to be very careful when setting out what we want from senior accounting officers. We have already discussed subsidiaries, including overseas subsidiaries and those that are sometimes set up for particular financial transactions, such as the purchase of plant, and I think that there are difficulties involved in that. I also think that there are difficulties involved in the appointment of a new senior accounting officer. The first thing that he or she will have to do is go through all the accountancy procedures and conduct a risk analysis of every part of the business. In the case of large companies, that could not be done particularly quickly. We shall need to see HMRC guidance on what senior accounting officers have to do.
	We know that there will be penalties for inaccuracies, but it would be useful to be given a definition of what would be considered an inaccuracy. In any large organisation it is possible to make small mistakes involving minimal amounts of tax, and no sensible tax authority will take everything to the nearest penny. However, the individuals living under this regime will need to know about scale. In the case of large or significant tax liabilities, that would seem to be a sensible requirement.
	We are told that there will be a fine of £5,000 a company per year. If 20, 30, 50 or 150 companies were involved, could a multiple fine be imposed on a company and its subsidiaries, and could it be imposed over multiple years? What is the potential liability faced by individuals? As I said earlier, this is a bit different from limited liability. Could the fines be levied by HMRC, and is there an appeal process? According to the explanatory notes, a "reasonable excuse for...failure" will be accepted as a reason for HMRC not to levy fines, but we do not know how HMRC will be persuaded that an excuse was reasonable. There might be an argument between the tax authorities, which must discharge their responsibility to collect as much money as possible, and the company about what is reasonable.
	We need to know much more about the costs imposed on businesses. Even if the Minister qualifies what the impact assessment says about company size, I shall want to know whether the costs will be reduced for smaller companies. Will HMRC insist on the provisions applying to all limited companies at some point, and what impact would that have?
	We need much more information about clause 92. I think that it would be very useful if the amendment were accepted so that the implementation of the schedule could be delayed to allow proper consultation. It is important not to reduce the responsibilities of members of boards, and indeed those of auditors. My hon. Friend the Member for Fareham might agree that auditors quite often avoid their responsibilities nowadays, and that many of our financial problems might be caused by that.
	There are a great many questions to be answered. I hope that the Minister can reassure us and that, by the time the Public Bill Committee sits, we shall have much more published information so that we can test the Government's proposal. We know that it is important to raise legitimate tax from companies, and the American example might be a useful one, but I shall not be in favour of the proposed arrangement unless I am given a great deal more information about the impact on business and individuals, and about the Government's direction of travel.

John Howell: Consensus is emerging on the need for a transparent financial and accounting system. There might be a need to improve and tighten up tax accounting arrangements, but I am not convinced of the merit of the Government's approach. The question that I am still asking is, "Why now?"
	The hon. Member for Coventry, North-West (Mr. Robinson) described some ways in which pressure could be put on finance officers in the banking system, but I do not think he was suggesting that there was any evidence that that had already happened. While his observations were valuable as theoretical points, they left me still wondering what specific evidence had led HMRC to require clause 92 to deal with an existing problem. It would be helpful if the Financial Secretary could return to that question.

Geoffrey Robinson: What the hon. Gentleman says about my comments is pretty well true, but given the entirety of what has happened to investment and other banking systems in America and here, it is hard to escape the conclusion that not just the risk element but the overall finance control system in those banks was nowhere near strong enough.

John Howell: That is a valid point, but I am trying to establish whether there is a causal link between what happened to the banking system and the introduction of clause 92. So far I have seen no evidence of that, or of a causal link with other things that have gone wrong.

Robert Syms: The hon. Member for Coventry, North-West (Mr. Robinson) made a good point about the banks. The views of accounting officers on the company and its reports might depend on whether they were in line for bonuses.

John Howell: As usual, my hon. Friend makes an interesting observation.
	I was not sure whether the hon. Member for Coventry, North-West was saying that it was not a good idea to consult before provisions were inserted in a Bill because that would lead to the distortion of those provisions, but if that were the case, I would not see the point of consultation at all. His argument undermines the whole process and casts an unnecessary pall over what I consider to be the positive and mature way in which organisations such as the Institute of Chartered Accountants have approached consultation on a range of issues with a number of bodies, including the Government.

Geoffrey Robinson: My basic premise is indeed that it is better to invite consultation once the purpose of proposed legislation has been stated but, as I tried to explain to the hon. Member for Fareham (Mr. Hoban), the corollary is that the Government must be prepared to amend legislation, realistically and willingly, in the course of the consultation.

John Howell: That is an interesting point, but I do not believe that the trust that is necessary between the bodies being consulted and whoever is consulting them will be strengthened by the fact that they are being consulted only when the structure and philosophy of legislation has already gone quite a long way down the road.
	Let me say a bit more about philosophy. The hon. Member for Wolverhampton, South-West (Rob Marris) made a valid distinction between the philosophical differences between the approaches to the clause adopted by the two sides of the Committee which, I think, are exemplified by paragraphs 23 and 24 of the explanatory note on clause 92. Paragraph 24 establishes what we consider to be the better principle-based approach in stating:
	"Ensuring appropriate tax accounting arrangements are in place is no more than compliant companies will be doing already."
	There are two points to be made about that.
	"Ensuring appropriate tax accounting arrangements are in place"
	is the principle that we would expect to underlie the clause, while the words
	"is no more than compliant companies will be doing already"
	raise the question of why the clause is needed at all. What evidence will there be of the number of non-compliant companies, and how is that number to be established?
	Paragraph 23, which the hon. Gentleman quoted, states:
	"Currently, there is no legal obligation on any particular director...to ensure that the company has appropriate tax accounts arrangements."
	To me, that illustrates a tendency towards a rules-based system which, in my view, has a number of negative effects on companies' positive approach to organising their affairs. I am in the principles-based camp; I do not think that we should tie things up unnecessarily.
	I wish to turn to the Sarbanes-Oxley Act comparison, because a number of issues arise there. Given that a comparison has been made with that measure and that reliance has been placed on the experience of it, I wonder whether any reasonably substantial and detailed work has been done to examine its effects. It is fine to talk in terms of generalisations and broad comparisons, but we need detailed experience if we are going to rely on it. We have seen one aspect of how that measure could materially affect companies: the additional costs and obligations that it puts on them. I understand that the accounting profession takes the firm view that additional costs arise from the measure.
	The other issue that Sarbanes-Oxley raises has already been touched on in relation to materiality. The Act introduced something related to financial accounting rather than to tax accounting. As I understand it, built into that system is a concept of materiality. We need an indication from the Minister as to whether we are now accepting the concept of materiality in tax returns as well as in financials.
	It would be useful to understand a bit better the way in which what is required by the clause will interact with the existing accounting framework. Most accounting systems comply with UK generally accepted accounting principles, but are we now saying that changes will be needed to UK GAAP to reflect the tax aspects of the measure? Are we saying that, for tax purposes, we will need additional requirements above UK GAAP? The measure does not address the question of integration within one system and how we judge, in terms of the prospect for revenues, other accounting regulations—not just UK GAAP but overseas regulations.
	For the reasons that I and that many hon. Members have given in the light of the uncertainty surrounding the clause, I support the amendment.

Stephen Timms: We have had a useful discussion on this important measure. In the Budget, the Government took difficult decisions to support fiscal consolidation, taking steps to support businesses and households, but also setting out the credible path that we must follow to return public finances to sustainability in a fair way. Protecting tax revenues is an important part of that. It is right that as part of our fiscal consolidation, we act now—I recognise that there is some urgency—to lock in tax compliance and to protect tax revenues.
	The majority of senior accounting officers are already ensuring that appropriate tax accounting arrangements are in place in their companies or groups. For them, the burden of the new requirement will be minimal, requiring little more than to certify the existence of what is already in place. However, a minority—I think it is quite a small minority—of companies do not have robust systems and processes in place. It is difficult for either the company or HMRC to know whether the right tax is being paid. We want identified individuals to take responsibility for putting that right. I will give a couple of examples.

Mark Hoban: If the weaknesses in the system were so great, would not the Minister have expected those companies' accounts to have been qualified?

Stephen Timms: Let me give the hon. Gentleman the examples that I have in mind. There have been companies where tax computations are calculated incorrectly each year due to known accounting system problems. We want it to be clear whose job it is to sort that out. One group had systems problems every year, could not identify the source of the problems and could not satisfy HMRC that the tax computation was correct. It needs to be crystal clear whose responsibility it is to resolve such an issue. Therefore, this is not about human error or genuine mistakes, as paragraph 1 of schedule 46 makes clear. It is about systems problems leading to persistent under-reporting of tax.
	Clause 92 therefore places a legal obligation on senior accounting officers to establish and maintain appropriate tax accounting arrangements. It builds on the approach that HMRC has been taking since the 2006 review of links with large business, which I think has been widely welcomed, enabling companies to work with HMRC and to establish a low-risk tax relationship through transparency, picking up the point rightly made by the hon. Member for Taunton (Mr. Browne), and through co-operation. Clause 92 simply provides that existing good practice among the majority of large companies is spread across all large companies. The measure reflects what should already be in place. We are clarifying the responsibility for ensuring that tax accounting arrangements comply with established good practice.
	As we have established, the detail of the measure is set out in schedule 46, and I look forward to the full debate that has been presaged in this exchange, when we will discuss the detail in Committee. We said at the Budget that we would move quickly to consult on detailed implementation. I recognise some of the concerns that have been expressed in this debate; indeed, they have been raised with me. In response, we will table amendments to schedule 46 in Committee. I agree with my hon. Friend the Member for Coventry, North-West (Mr. Robinson) that that is the right way to deal with these matters. Let me outline the amendments that I envisage tabling.
	First, as I said earlier, we need the right balance between safeguarding revenues from larger companies and the compliance cost for business in terms of what counts as a large company. I am now satisfied that the base of companies within the scope of the measure can be narrowed to strike a better balance. Our current thinking is to limit the measure to those companies with a large business relationship with HMRC, and a customer relationship manager reflecting that—fewer than 2,000 companies in total, compared with about 15,000 under the definition set out in schedule 46 as drafted. We will have further discussions about that approach before we take a final view, but we will then table amendments in Committee, rather than introduce regulations under paragraph 17 of the schedule.
	Secondly, schedule 46 as drafted—the hon. Members for Fareham (Mr. Hoban) and for Taunton commented on this—requires senior accounting officers either to certify that the company's tax accounting arrangements are appropriate or otherwise to explain the respects in which those arrangements are not appropriate, with different certificates for each of those two cases. I am now satisfied that that would work better with a single certificate, on which the senior accounting officer sets out either one position or the other, rather than two different types of certificate as provided for in the draft schedule.
	I accept that the requirement to notify the company's auditors as well as HMRC of the respects in which the tax accounting arrangements are not appropriate could pose operational difficulties for businesses which are disproportionate to the importance of that measure, so an amendment will be tabled in Committee to remove that requirement from the schedule.

Rob Marris: On amendments, may I suggest that the Minister looks at the definition of a senior accounting officer? Currently the definition is
	"the director or officer of the company who has overall responsibility".
	I think that it should be a director; it should not just be an officer, who could be below board level. I want the focus to which I referred in one of my interventions on the generous hon. Member for Fareham (Mr. Hoban).

Stephen Timms: I will certainly reflect on that, but it should be for the company to determine who will have the overall responsibility that the schedule sets out, so I would be hesitant about being more prescriptive.

Geoffrey Robinson: The point of the person being on the board, as opposed to being an officer, is that being on the board carries certain specific personal liabilities. The chief financial officer or the person with tax responsibilities might in many cases be taken off the board precisely so that they avoid that sort of responsibility, which a directorship carries with it. Will my right hon. Friend undertake to look into this point?

Stephen Timms: I will be very happy to reflect on it, but it should be the company concerned that makes the judgment as to which individual should carry this significant personal responsibility, which is rightly set out in this part of the Bill.
	The hon. Members for Fareham and for Taunton asked when guidance would be ready, and I agree with them about the importance of getting the technical guidance right. The legislation must be implemented in a way that is consistent with the intention that I have set out. There should be minimal impact on companies and their senior accounting officers who already have robust systems in place, and HMRC is having some good discussions with those involved. It will work with them to develop and agree the guidance, and I will ensure that draft guidance is with the Committee before it considers the schedule.
	The hon. Members for Fareham and for Henley (John Howell) talked about the reference to Sarbanes-Oxley in the impact assessment, and I understand why they did so, but we need to make it clear that we are not here importing Sarbanes-Oxley legislation to the UK. Sarbanes-Oxley is very extensive and covers a far wider range of issues than the quite limited measure in question, such as corporate governance, financial reporting and company law, rather than tax. No specific element of Sarbanes-Oxley is replicated in clause 92 or schedule 46. There is an analogy in that an element of personal responsibility is a characteristic of both the Sarbanes-Oxley legislation and this measure, but none of the specific Sarbanes-Oxley measures is replicated here.
	Let me pick up on some of the other points that have been raised in the debate. I hope that former accountants enjoying their retirement in Sandbanks and elsewhere will be reassured to learn that because the obligations imposed apply only in relation to financial years beginning on or after Royal Assent, there is no question of any senior accounting officer being held retrospectively responsible for any shortcomings in a company's tax accounting arrangements.
	I have mentioned one set of regulations that the draft schedule gives us the power to introduce: those to restrict the number of companies. As I have made clear, we will not be introducing such regulations, because we will take the action through amendment instead. We will be able to bring forward in draft form the other set of regulations, on penalties, that schedule 46 allows us to introduce before we reach that part of the debate in Committee.
	The Government should be able to expect senior accounting officers to be satisfied that they have the appropriate systems in place to ensure that they can submit accurate tax returns. As I hope I have suggested, there is a problem, which clause 92 addresses.

Mark Hoban: Will the right hon. Gentleman comment on the issue of materiality? We discussed this point earlier in the context of the materiality that auditors use to sign off accounts. What level of materiality will HMRC employ when looking at the appropriateness of tax accounting systems and the accuracy of returns?

Stephen Timms: As the hon. Gentleman knows, companies already have an obligation to deliver correct and complete returns. The measure ensures that the minority of senior accounting officers who do not oversee systems that generate correct and complete computations take responsibility for addressing that. That is the level of the bar that we envisage applying.

Mark Hoban: There may be a systemic problem in a system that means that the calculation of tax on each transaction is out by as little as a penny or as much as a pound, and clearly those different amounts will have a different impact on the tax liability. How precise does the Revenue expect to be in applying these sanctions to senior accounting officers?

Stephen Timms: That is a perfectly fair point and we will certainly need to address it in the guidance, but what is important is that this is about ensuring that the systems are sound and robust, rather than about the dangers of mistakes that might from time to time occur.

Mark Hoban: The right hon. Gentleman gave an example earlier involving a company that was systemically under-reporting tax due from year to year. How much is involved in that case?

Stephen Timms: I do not know the precise figures in that case. The hon. Gentleman mentioned the figure that we set out in the Budget documentation on Budget yield over the next few years arising from this measure. We estimate that in the first year there will be an additional tax yield of £40 million, and a rather larger sum in the years after that. Cumulatively, we are therefore talking about significant sums, and this is an important contribution that is needed for the fiscal consolidation that we require.
	As I have said, we need to make some amendments, including in the light of perfectly fair points made in this debate.

Geoffrey Robinson: There is a natural preoccupation that systems should be robust, but it has always struck me that systems can be as robust, detailed and complicated as we like, but they are only as good as the people who operate them. It is good that this complementarity has been introduced. Systems must be robust, but in order to make sure that they work properly, the first officer responsible has to see to it that the sanction and responsibility put on them will achieve just that end.

Stephen Timms: My hon. Friend is right and I am grateful to him for making that point.
	The hon. Member for Taunton is right that it does not make sense to defer this measure for a year. There are certainly some detailed measures that we need to introduce and debates that we need to have, and as I have signalled, some amendments will need to be tabled. There would, of course, be a cost in deferring for a year. We need to get on with it, and the Government's response in terms of the fiscal consolidation we have set out needs to proceed. I therefore hope that the hon. Member for Fareham and his hon. Friends will feel able to withdraw their amendment. If they do not, I hope the Committee will reject it.

Mark Hoban: I am not convinced by the Financial Secretary's response to the debate. He talks about what we are considering being an appropriate measure of fiscal consolidation that will raise £40 million in the first year. This is in the context, of course, of a budget deficit of £175 billion. I asked him about the monetary amount of the systems error that he prayed in aid in respect of this measure, but he did not know how much that was going to be. I worked out, not in a systematic way but on the back of a notional fag packet, that the amount involved per business covered by this measure would be £30,000 to £40,000, which is not a material sum. I am just not persuaded yet that the Financial Secretary has made a case as to why we should impose this legislation on large businesses, notwithstanding the welcome concession that he has made in restricting the number of businesses to which it will apply. Why would this measure be imposed without any real work having been done by the Government on the costs that businesses will incur as a consequence of its introduction?
	The hon. Member for Coventry, North-West (Mr. Robinson) takes a very bullish view on consultation, and it is important that we get tax legislation right. The Financial Secretary has accepted that there will be amendments in Committee, and I welcome that. However, there are examples of legislation that has been rammed through quickly and which we have had to come back to in successive years to get right, and I just do not think that the Government have taken sufficient care over this measure to warrant its introduction when this Bill receives its Royal Assent some time in July. More work needs to be done by the Government to get this right, and to understand issues associated with materiality, who the senior accounting officer will be and the application of this measure. It is right to delay implementation by a year, so that the Government get it right and do not impose an unnecessary cost on business without a firm grip on the benefits that this is due to bring. I therefore ask my hon. Friends to support amendment 4.

Question put, That the amendment be made.
	 The Committee divided: Ayes 154, Noes 285.

Question accordingly negatived.
	 Clause 92 ordered to stand part of the Bill.

Clause 14
	 — 
	Rates from April 2010

Question proposed, That the clause stand part of the Bill.

David Gauke: I do not know whether it is appropriate to say so in these circumstances, but it is a pleasure to serve under your chairmanship, Mr. Atkinson.
	Vehicle excise duty was one of the stories of last year's Finance Bill and the 2008 Budget. I will be relatively brief—and I can assure the Exchequer Secretary that this issue will not keep her here until the early hours of the morning—but it may be useful to return to the proposals in that Budget. In particular, I wish to take the opportunity to pay tribute to the tenacious work of my hon. Friend the Member for Putney (Justine Greening) in examining and unravelling the Government's case.
	The Committee will recall that in the 2008 Budget the Chancellor of the Exchequer set out his proposals to reform vehicle excise duty, which included introducing a greater range of gradations in bands on the basis of CO2 emissions. He told the House that that was a sensible green measure, saying that
	"the road tax system should do more to support the use of more carbon-efficiency...There will be an incentive to encourage drivers to choose the least polluting car."—[ Official Report, 12 March 2008; Vol. 473, c. 297.]
	My hon. Friend started to examine the details of that policy and several points emerged.
	First, the Chancellor claimed that the proposal was a green measure, but it clearly sought to raise revenue. Of course, the proposals on vehicle excise duty in this Finance Bill have been largely shaped by the arguments and the analysis of last summer. Thanks to my hon. Friend's work, it emerged that the original proposals would reduce motor vehicle emissions by 160,000 tonnes a year by 2020. To put that in context, that is a fraction of 1 per cent. of total transport CO2 emissions, which in 2006 amounted to 120 million tonnes. We can see immediately that the proposals' green credentials were somewhat weakened, and I would be grateful if the Exchequer Secretary gave her assessment of the green benefits of the original proposals and of the proposals in clause 14.
	Another green argument needs to be addressed. It was persuasively argued that a number of older cars would essentially become unsaleable and have to be scrapped as a consequence of the new VED scheme, which would have an environmental impact. I do not wish to deviate from the subject of VED, but that point throws up the issue of the environmental impact of the car scrappage schemes. It would be helpful if the Minister said a word or two on the environmental pluses and minuses of scrapping older cars. Clearly, newer cars are more efficient and, by and large, have lower CO2 emissions, but quite a lot of carbon is involved in car manufacture. I ask that purely to inquire about the Government's analysis.

Rob Marris: May I inquire, purely to seek information, whether the hon. Gentleman can confirm that his party stands by its commitments on green issues, particularly on green taxation?

David Gauke: Yes, we do. I shall come back to that point—that was a perfectly fair question. I suspect that quite a bit of this afternoon will be devoted to green taxation of one sort or another. After this debate, we will debate fuel duties and I want to say quite a bit more on the subject at that point.
	My second point is to ask whether the VED proposals in the last year's Budget and those in this Finance Bill are retrospective. I have already praised my hon. Friend the Member for Putney, but a word should also be said about the hon. Member for Blyth Valley (Mr. Campbell), who tabled an early-day motion and secured considerable support from both sides of the House—

Jeremy Browne: What about the hon. Member for Wolverhampton, South-West (Rob Marris)?

David Gauke: Indeed, it would be a great omission not to mention him.
	Is the measure retrospective? If someone has bought a car that was made or registered after 2001, and subsequently found that they will pay more VED in future years, they are committed to that car. They are stuck with it and are faced with a tax bill that they did not anticipate. People argued whether the provision was retrospective—I think that it is —and I would be grateful if the Minister confirmed her view. On 14 May 2008, in column 1495 of  Hansard, she referred to page 121, paragraph A.97 of the Red Book, which, she said, contained details of the retrospective element. It seems to me that there is a retrospective element, and that point applies to this clause, albeit that the effects are less dramatic than perhaps was originally envisaged last year. Will the Minister confirm her interpretation of that point?
	That raises the issue of unfairness and of who will be hit by the provisions. The hon. Members for Blyth Valley and for Wolverhampton, South-West asked who would be affected by the change in VED. Let me put that in the context of the clause, although that question could still be asked of the original proposals. It would appear that some 1.2 million drivers will experience rises of more than £200, and that many others will be affected. They would say that it is very difficult to change their behaviour when they have already acquired the cars, which comes back to the green taxation point I was making a moment or so ago.

Angela Eagle: Will the hon. Gentleman give way?

David Gauke: I will. I should make it clear that the figures I have been quoting are those given in the debate last year. If the Exchequer Secretary can update me, I would be very grateful.

Angela Eagle: Will the hon. Gentleman at least acknowledge that we are talking about increases in VED this year of no more than £5 per car and increases of no more than £30 next year?

David Gauke: I do. In the pre-Budget report, the Government changed their position, and many of my remarks praise those who were able to persuade the Government to do so. I am asking the Minister to explain what persuaded them to change their position. Was it the argument that it was not a green tax? Was it the argument that it was retrospective? Was it the argument that those who were going to be affected were not just rich executives driving around in gas guzzlers but those across the income distribution scale? What persuaded the Government to move from the position we were in this time last year to the position we are in now, where, as the Minister says, the increase will be no more than £5 this coming year and no more than £30 next year? I am trying to understand the Government's position.
	There is continuity in what we had last year and what we have this year. In both the Budget and the pre-Budget report, which essentially set out what we have now, the Government stated that the majority of drivers will be better off or no worse off under the proposals. That is right, in my understanding. However, it is right in relation to the original proposals only if one includes those drivers who are not paying graduated VED at all. Let me quote the figures from last year—I am sure that the Minister will update the Committee on the figures for this year. The vast majority of the 15.5 million motorists who paid graduated VED would pay more. I would be grateful if the Minister said that that figure no longer applies.
	I want to make it clear that we are not just talking about the larger models. The duty would also apply to people who drive Ford Mondeos. I should declare an interest as a driver of a Ford Mondeo estate—

Rob Marris: A larger car.

David Gauke: Larger is all relative. We are not talking about sport utility vehicles or Humvees. Renault Méganes and even some Nissan Micras were affected. Where do we stand now? By 2010-11, how many people will be paying more? Who is affected? What is the breakdown?
	This year, VED is not the big controversial policy it was. That is largely due to the efforts of hon. Members of all parties, and we are grateful that the Government listened to the case made by my hon. Friend the Member for Putney and others. They said that the policy announced in last year's Budget was misguided and retrospective, that it was ineffective as a green policy and that it would affect people of all incomes.
	Progress has been made, but I look forward to the Minister explaining precisely which arguments the Government found so persuasive that they were prepared to back down.

Frank Field: As you know, Mr. Atkinson, I and my hon. Friend the Member for North-West Leicestershire (David Taylor) have tabled amendment No. 16. For reasons that we well understand—although people outside may not—it is not in order for that amendment to be called today, so I am grateful to be able to participate in this debate. In my short contribution, I shall talk about VED but also, if I may, about other forms of taxation on motorists.
	I accept that taxation is going to go up in the next five-year period, so I shall not undertake any special pleading to try to convince the Minister that the concerns of my constituents should somehow render them exempt from the Government's need to balance the national accounts over the medium term. The hon. Lady is the Member for Wallasey, which means that she is my neighbour in the Wirral—

Angela Eagle: And friend, I hope.

Frank Field: And friend, very much so. I was going to call her my very honourable Friend, as both of our expenses have been published, but I did not know whether the term would be in order. The Minister is, of course, my very, very hon. Friend the Member for Wallasey, and I hope that she will say whether, before the next Budget, the Treasury will assess the distributional impact on households with different incomes and in different parts of the country of duties imposed on motorists as a result of the need to increase revenue across the board.
	Such an assessment would add to the rationality of the debate, but since I have not got 38 or so Back-Bench Labour MPs to sign the amendment it poses no threat to the Government. However, it would help our constituents to understand that the Government are thinking carefully about any future tax increases that they may have to make. It would also help to convince them that taxation on motorists will be underpinned by a distributional analysis to ensure that the poorest motorists are better protected than the richer ones.

Jeremy Browne: I am grateful to have an opportunity to contribute to the debate on an element of the Bill that I readily concede—and as the hon. Member for South-West Hertfordshire (Mr. Gauke) noted—is less contentious than it was last year. What made it so contentious last year was the element of retrospection, and I remember an interesting debate about whether all new taxes had a degree of retrospection. However, many hon. Members felt keenly that the proposals on VED last year had a greater degree of retrospection than most tax proposals.

Frank Field: Will the hon. Gentleman give way?

Jeremy Browne: I will in a moment. To some extent, the fact that the higher rates will not be implemented until next year means that the sting has been taken out of the proposal—although perhaps not to the entire satisfaction of the right hon. Gentleman.

Frank Field: I thank the hon. Gentleman for giving way. As the Budget comes after the beginning of the financial year, is not all taxation retrospective?

Jeremy Browne: I do not want to get too far off the beaten track, Mr. Atkinson, but for a person who earns £200,000 a year, the Government's proposal to introduce a 50p rate of tax on incomes over £150,000 a year could be called retrospective, on the basis that that person could not have anticipated the change when he accepted a job offer in the first place. It was argued that the proposals on VED were no more retrospective than the example that I have just given because, if that example was seen as retrospective, whole areas of the Finance Bill would be deemed to be unacceptable.
	I was not entirely sympathetic to that argument. I understood it, but I felt that any attempt to effect behavioural change by using VED differentials meant that the tax change also had to impact on people buying cars for the first time. They had to be in a position to make important decisions about such a purchase and so they had to know the VED rates that they would face.
	It is important that we examine these matters in detail, but the danger is that we lose sight of the big principle, about which all parties are essentially in accord. We may differ on the degree, but we accept that there must be some differential between the lowest polluting cars and the highest, and that that differential should be graded. My party argued for that differential before the Government introduced it in 2001. We had made the case forcefully for many years before then, and I remember that we were sometimes criticised for doing so. However, the notion of having a differential seems now to have become the accepted wisdom.
	Why is a differential deemed to be a good idea? Transport clearly contributes to CO2 emissions and pollution. It is only one contributor among many, but it is significant, so encouraging people to use more fuel-efficient models of car is deemed to be in our collective environmental interest.
	It is also worth noting in passing that the principle is being applied more widely. London's congestion charge may be rather inaccurately titled now, but it contains an element of the principle. Interestingly, residents' parking in the Taunton Deane borough council area in my constituency will be free for people whose cars are in the lowest category of emissions, and half price for those whose cars are in the second lowest category. Instead of disincentivising people with high-emitting cars, the scheme incentivises people with very low-emitting cars, and that is a sensible and practical change.
	My point may be slightly off the beaten track, but incorporating a component in VED that attempts to affect people's environmental behaviour is widely accepted to have merit. If it is not retrospective, one would hope that the impact would be of even greater benefit to the environment, and that the population at large would deem the tax to be fairer.
	In the past, my party has spoken about the impact of VED rises on very rural areas, something that always comes up in these debates. People in such areas need to use cars—

Rob Marris: That is the next debate.

Jeremy Browne: The hon. Gentleman says that that is the subject of the next debate, which is about fuel. He is right, and people who have to drive longer distances because they live in remote rural areas are going to use more fuel. However, some people in urban areas may not need to drive at all, whereas people in remote rural areas may have no choice—for example, they may have no other way of getting to work. My party has said that we should at least explore options for giving assistance with VED to people whose principal address is in a very remote rural area.

Robert Smith: People who live in remote rural areas often find it essential to have a larger, more fuel-inefficient vehicle, thanks to the nature of the climate, the need to drive on winter roads, and so on. Also, their vehicles often have to have a dual purpose: they have to be family vehicles and they also have to be able to cope with work, be it on farms or in the forestry or tourism industries. People in remote areas do not have the same choices as people in urban areas.

Jeremy Browne: My hon. Friend makes a perfectly valid point. People in extremely remote areas, and not just those who live outside the big cities, have two practical considerations. The first is that their need to drive is much greater, because there is little or no public transport where they live. The second consideration is the one that my hon. Friend described, which is that they may need to drive a vehicle with higher emissions because of off-road requirements and so on. That issue is worth exploring, but the clause does not do so and I shall therefore not dwell on it any further.

Frank Field: The provisions of the clause and those on fuel duties—the subject of our next debate—are precisely the reason why I made the plea to the Government to take a more comprehensive view of the impact of vehicle taxation, both geographically and on various income groups.

Jeremy Browne: The right hon. Gentleman makes an interesting suggestion, but I do not agree with his central premise for two reasons. First, there would be a significant revenue shortfall—I assume that that is why he was not able to get his amendment selected for our consideration. That is a serious point when we have an annual budget deficit of £175 billion. Presumably, the Government's measures are intended simultaneously to effect behavioural change and to raise revenue, which is not impossible. The Government raise revenue and try to effect behavioural change through tobacco duty, for example. There is a trade-off of sorts, but it is possible to pursue both objectives simultaneously.

Angela Eagle: The hon. Gentleman is of course right to say that it is possible to raise revenue and effect behavioural change at the same time. Although I would not put them in precisely the same category, VED and tobacco duties are examples of that phenomenon. However, I assume he agrees with me that if one is really successful in changing behaviour, the revenue-raising aspect of the tax tends to diminish.

Jeremy Browne: Indeed it does. The Government face the peril of being more successful than they intended to be.
	That leads me neatly to my second concern about the proposals made by the right hon. Member for Birkenhead (Mr. Field), which is that the straightforward commercial or financial incentives to pick lower-emission cars would be reduced. My party wants those incentives to be in place.
	The right hon. Gentleman makes an interest point about the impact of some behavioural taxes on different social groups. Tobacco taxation, for example, has a disproportionately large impact on people in the lower income deciles, because they have a greater propensity to smoke. That is one of the reasons why, in percentage terms, the total tax burden on people on lower incomes is in many cases greater than the burden on people on higher incomes.
	There is a serious social question to be asked about some of the behavioural taxes, but it applies less to VED because many people in the lowest two or three income deciles cannot afford to drive—although I take the point made by my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith) that that is more true in urban areas than in rural areas: some people in rural areas on very low incomes have to drive. However, large numbers of people, particularly in cities, on low incomes do not have cars, and those on relatively low incomes who do have cars tend to pick models with smaller engines, although not exclusively, of course. My point is that the social impact of VED differentials is less pronounced than that of other forms of behavioural taxation.

Frank Field: I do not want us to get muddled up with smoking taxation. I am raising the issue of low-paid workers—people who want to work and who do work—who face the cost of getting to work in their cars. The question they posed, which I put to Treasury Ministers, is whether there might not be fairer ways of raising the necessary revenue—I am not asking for revenue cuts—by shifting from taxation of petrol towards the taxation of vehicles.

Jeremy Browne: Perhaps the Minister will deal with that in her response. I recognise, as I am sure all hon. Members do, that there are practical considerations for people on low incomes who wish to work and for whom motoring represents quite a large proportion of their overall expenditure. That is particularly true in rural areas, where the need to drive and to drive longer distances is greater. However, I do not accept that that alone makes the case against VED differentials. In fact, one could argue that it would be more appropriate to have more pronounced differentials, so that people with low-emission cars are incentivised to an even greater degree compared with people who have high-emission vehicles.
	That is why I mentioned in passing—Mr. Atkinson, I hope you agree that, if I touch on it only briefly, it is relevant—why I am keen to see measures introduced that do not have significant revenue-raising implications, such as giving people tax exemption on residents' parking if they have low-emission cars. That positively incentivises environmentally responsible behaviour. Not only can such measures have a positive impact on low-income groups, but they send out a powerful signal about our collective environmental responsibilities.
	My party has argued for an initial VED levy to be charged on new cars and graded so that the charge is highest on high-emission cars. We talked about a so-called showroom tax and, in effect, the Government are introducing a variant on that theme by setting a higher initial rate. One can brand measures in different ways, but the objective remains the same, which is to encourage people to think about buying a lower-emission new car by giving them a financial incentive to do so.
	I am not sure that the Government's policy is entirely consistent across the piece. The so-called scrappage scheme is to be introduced, which seems to be designed to encourage people to buy new vehicles, whereas some might interpret the VED measures as a fairly strong inducement to stick with their existing vehicles, as doing so means that they will not incur the additional higher VED rate in year one. I am interested to know whether the Minister believes that the measure will stimulate the sales of new cars, as some MPs, especially those representing west midlands constituencies and parts of the country with a motor manufacturing tradition, want. Are the Government trying to stimulate sales through the Department for Business, Enterprise and Regulatory Reform, but trying to restrict them through the Department of Energy and Climate Change and the Treasury? If so, people are being sent conflicting signals.
	We are pleased that the measure is not retrospective. It seems to be far less controversial than last year's VED measure, and it sends out a powerful environmental signal. Although we do not accept it in its totality and think it could be modified and improved, the broad principle behind the Government's thinking seems to us to be aimed in the right direction.

Rob Marris: For the purpose of this debate, I declare an interest in that I drive a car with CO2 emissions of 119 g/km and my wife drives one with emissions of 108 g/km.
	I am delighted that the Government reconsidered the retrospective measures proposed in Budget 2008, following the work done by me—I think that I was the first person to raise the subject in the Chamber—my hon. Friend the Member for Blyth Valley (Mr. Campbell) and the hon. Member for Putney (Justine Greening), who was present for the early part of this debate. It raises a question about the concept of being open to discussion and public debate and the tendency in the UK body politic to decry changes of position by Government or Opposition parties as U-turns, when such changes are often the result of productive discussions, informed by fresh information. That is what my Government did in relation to the VED proposals made last year, which were withdrawn and have been reintroduced, in a very much reworked form, in clause 14. They are now much better.
	I did want to say a little about the general structure of VED, because I think it is entirely right that it should be graded according to the CO2 emissions of the vehicle. I know that my right hon. Friend the Member for Birkenhead (Mr. Field) has some reservations about that, particularly because of the impact the duty could have on lower socio-economic groups driving older cars, which tend to be bigger-engined. I would caution that if we moved away from the proposal in clause 14 to grade VED according to emissions to one based on engine size, that could present difficulties for diesel engines, for example. The car I drive has a diesel engine of approximately 1400 cc and it produces a much lower rate of CO2 emissions per kilometre than a 1300 cc model of the same car with a petrol engine, so one has to be a little careful. I know that there are concerns about diesel engines and particulates, but I am told that such concerns are sometimes overstated.
	May I say, somewhat parenthetically, that I welcome the slight change to the company car tax regime on CO2 emissions per kilometre, which I believe is a progressive measure, referred to in paragraph A.119 on page 167 of the Red Book? There is also a reference in paragraph A.120 on the same page to the lifting of the £80,000 cap on the list price, which I must confess I did not previously know existed and seems rather bizarre.
	Why does clause 14 still provide for the "reduced rate", as it is called? My understanding, as it stated in paragraph 28 of the explanatory notes to the clause, is that the reduced rate
	"applies to cars using alternative fuels or featuring a hybrid fuel-electric powertrain. Alternative fuels include Liquefied Petroleum Gas, Compressed Natural Gas and high blend (85 per cent. content) bioethanol."
	On grounds of tax simplification and the rate differentials in tables 1 and 2 of clause 14—they are not, in any case, very great—I would urge the Government to reconsider whether the reduced rate should exist at all. That consideration is particularly relevant when some environmental concerns have been raised about whether we should encourage the use of LPG fuel in vehicles.
	According to table C6 on page 131 of the Red Book, for 2009-10, VED is projected to raise £5.6 billion. Given the changes that will take place from 2010-11, as set out in tables 1 and 2 of clause 14, I hope that the Minister will be able to tell us this afternoon what the projected VED revenues will be for 2010-11 and even for 2011-12, bearing in mind that VED principally covers light passenger vehicles, but also commercial vehicles, light vans and so forth.
	I start from the point—as, I suspect, do most hon. Members apart from the flat earthers on climate change—that it is a good thing to use taxation measures to discourage polluters. Cars that emit higher levels of CO2 per mile driven pollute more and mess up the planet more, so I salute what the Government have done in recent years by introducing the 15 bands of VED in an attempt to change consumer behaviour through a tax mechanism. I similarly salute what the last Conservative Government did, following the efforts of the Campaign for Lead-free Air of which I was a member, to encourage motorists through a tax mechanism to switch from leaded to unleaded petrol. That produced changes very quickly—both in consumer behaviour and the type of vehicles produced by motor manufacturers within the UK, including the west midlands, and abroad.
	In recent months, because of the oil price spike last year and what the Conservative party refers to as the age of austerity, I understand that sales of small cars are increasing proportionately to those of large cars. I would categorise a Ford Mondeo estate as a large car in respect of its dimensions and, in many versions, its engine size. I view the change as a step forward, but I stress the word "proportionately", because although small cars may have recorded more sales in recent months, overall sales have fallen markedly. That, of course, adversely affects the motor industry around the country.
	Table 1 in clause 14 shows that a new vehicle will be exempt from VED in the first year when it produces fewer than 130 g of CO2 per kilometre driven. That is a good step forward and, in future years, I urge the Government to keep the matter under review with the aim of lowering the exemption threshold from, say, 130 g to 120 g. The European Union has been striving against backward-looking motor manufacturers—those manufacturers are now, sadly, reaping the whirlwind, as are their workers—to get the average for each manufacturer's fleet production down to 130 g. Table 1 currently provides for a first-year exemption only for those vehicles described as below the EU average.

Jeremy Browne: I share the hon. Gentleman's instincts. However, I am always a little cautious about exempting only such small cars because that makes the person in the street think it is just a ruse to provide the appearance of environmentalism, given it is so hard to find models that actually qualify for the exemption. Surely there may be some benefit in exempting some reasonably popular models of cars; they may not be right at the end of the emissions scale, but they are nevertheless near it. That might offer people what they regard as a genuine inducement rather than a bit of political manoeuvring.

Rob Marris: I take the hon. Gentleman's point. I am not an expert, but I understand that there are some relatively large cars coming in at an emissions rate of 130 g or below. In order to drive the motor industry by means of a taxation mechanism and to drive consumer behaviour—to use an appropriate verb—we need to keep the grading under review and push it further in the future. It is no coincidence that the European Union manufacturer with the lowest fleet average—from memory, I believe it is about 136 g per kilometre driven for all the new cars sold last year—is the one that is quite likely to take over Chrysler and Opel-Vauxhall: namely, Fiat. Relative to many other motor manufacturers, Fiat is thriving at the moment. Of course, all these things are relative, but I suspect that has happened because Fiat had the foresight to concentrate on smaller and lower-polluting vehicles. The two do not always go together. It is possible to buy some pretty polluting cars that have small external dimensions, just as it is possible to buy some relatively low-polluting cars that have quite large external dimensions.
	Turning to table 2, in clause 14, I note an element of retrospection in paragraph (a) relating to higher-polluting cars. For those cars with emissions between, say, 225 g and 250 g, for which the standard rate of vehicle excise duty would be £425 per year, for those registered before 23 March 2006 that rate will be £235. Such cars would now be three years old, but given the number of years for which society has imposed tax penalties for more polluting vehicles, I welcome and am content with that relatively minor level of retrospection. Similarly, for those cars registered before the 23 March 2006 cut-off date that produce more than 255 g in emissions, the standard rate of VED will be £245 per year rather than £435.

Jeremy Browne: Given the hon. Gentleman's undoubted expertise in this area of industry, does he anticipate that motor manufacturers, which, in many cases, are desperate for sales, might absorb the costs of first year VED, and include it in the list price for consumers? If so, will that stimulate demand and weaken the environmental message that the Government seek to send?

Rob Marris: As is the hon. Gentlemen's wont, he jumps ahead of me. I was referring to table 2, which relates to vehicles after the first-year loading. I am about to refer to table 1 and vehicles in the first year. I think the small element of retrospection is acceptable. Those vehicles with emissions of 255 g registered after 23 March 2006 will not get the discount from £435 to £245 that those registered before that date will get.
	Turning to table 1, to which the hon. Gentleman referred in his speech and intervention, there is a risk in relation to shifting cars in the showroom. As far as I know, almost everyone who buys a new car does so with the vehicle excise duty paid—it is shown on the invoice. Just as we see advertisements for "No VAT", which are not technically accurate as a discount is being given equivalent to the VAT chargeable on a list price, we may see such sales techniques creep into advertisements with regard to VED—for example, "No VED loading on a brand new car."
	VED loading simply on a first-year basis is not the way to go. As the hon. Gentleman put it, it would be a variation on a showroom tax. Company cars constitute quite a high proportion of the UK car market. Three years ago, the Liberal Democrats commendably picked up my proposal of about four years ago for swingeing vehicle excise duty on new cars bought after an announced change in the taxation regime had taken effect. That would be not merely a first-year loading. For example, under table 1, a car that emits 255 g or more of CO2 emissions would pay £950 at the standard rate in its first year, dropping to £435. For that kind of vehicle, swingeing vehicle excise duty is needed every year, not only to dissuade people from buying it, but to make them bear in mind the resale of the car. Such swingeing vehicle excise duty, as I proposed one year, although I put the grams per km threshold higher, would affect resale massively, and cause company as well as private buyers to think about whether they would buy such a polluting vehicle. They might be able to afford to run such a car year to year, but they would not be able to afford the hit on the resale price.
	Previously, I have had complaints from the public, who misunderstand the proposal. It is not an attack on 4x4 drivers. The last time I looked, nine out of the 10 most polluting cars on sale in the UK were not 4x4s. The one 4x4 in that top 10 was a Land Rover, which is produced in the United Kingdom. The others in the top 10 were sports cars and top-of-the-range cars such as Bentleys, which have huge engines and are huge vehicles. I urge the Government to consider again an ongoing—not retrospective—swingeing rate of vehicle excise duty for the most polluting vehicles. That would discourage people from buying such vehicles, not only because of their running costs but because of the adverse affect on their resale price. I hope the Minister will assure me that the Government will consider that in future years.

Angela Eagle: I hope that I can deal with some of the points raised by Opposition Members and by my hon. Friends on clause 14. As has been pointed out, the clause makes changes to vehicle excise duty rates for cars and vans, and those changes take effect from 1 April 2010. The clause introduces first year rates of VED for brand-new cars, as was, I think, mentioned by all who spoke. First year rates will be chargeable on the first vehicle licence taken out on a new car from 1 April 2010. They are intended to influence, up front, the purchasing choices of drivers who are buying brand new cars by acting as a strong signal at the point of purchase that people can save money by choosing lower-emission cars.
	The introduction of first year rates means that cars emitting up to 130 g of carbon dioxide per kilometre will pay no duty on their first vehicle licence. Cars emitting between 131 and 165 g per kilometre will pay the same amount for their first year rate as they will for all subsequent licences. For cars emitting more than 165 g per kilometre, first year rates will be higher than the standard rates applicable on all subsequent licences. Only those new cars with the very highest emissions will pay the top rate of £950.
	My hon. Friend the Member for Wolverhampton, South-West (Rob Marris), the hon. Members for Taunton (Mr. Browne) and for South-West Hertfordshire (Mr. Gauke), and to a lesser extent my right hon. Friend the Member for Birkenhead (Mr. Field)—the latter talked about the distributional effect of the measure, and I will deal with that point separately, if he will allow me to—all pointed out that tax measures try to change behaviour, certainly when they are based on trying to incentivise activities that have a smaller carbon footprint. That is a clear way of trying to change behaviour. As my hon. Friend the Member for Wolverhampton, South-West and the hon. Member for Taunton pointed out, the measures are also revenue raisers.
	Revenue raising is an important aspect of the part of the Budget documents that we are discussing. The remainder of our debates today are about duties that raise a certain amount of revenue. We must not forget, or lose sight of, the fact that it is perfectly reasonable for Governments to raise revenue with which to finance the things that they do with public money. I often have that discussion with the many people who come to tell me that we should reduce all the taxes that are levied, but who never tell me where we can find the extra revenue that they wish to see spent on whatever is in their interest; in the context of vehicle excise duty, that is often on roads or other infrastructure. I can see the hon. Member for South-West Hertfordshire wriggling in his place; I am happy to let him intervene.

David Gauke: I am far from wriggling. I wish to thank the Minister; she is being very clear, and the Committee appreciates that. The clause is about changes to vehicle excise duty, and that is about raising revenue. Governments have to raise revenue, but does she accept that when the policy—or rather, last year's policy—was announced, it was very much presented as an environmental policy? However, the Government's figures suggest that the environmental impact will be very limited.

Angela Eagle: I hoped that I was saying that there are some taxes through which one hopes to change behaviour, but which also have a revenue-raising element to them. Vehicle excise duty is one of those. Obviously, we wish to change behaviour, and I will talk about that later. We wish to incentivise people to buy cars with a smaller carbon footprint and lower CO2 emissions than those that were on the road in the past.
	That is a clear aim, but another aim is to raise revenue. We can do both. As was said earlier, there can be a balance. If a Government are very successful at changing behaviour, they may have to find other ways to raise revenue, because the more successful they are at changing behaviour by giving signals through taxes, the less their tax take will be. As they need to finance public services and everything that our constituents want the public services to provide, such as health and education, other ways must be found to finance them. That balance exists, and is accepted in all parts of the House.
	Tax measures are only one means of changing behaviour. Another is regulation, which applies particularly in this instance, as was pointed out by my hon. Friend the Member for Wolverhampton, South-West, with his knowledge of these matters. He mentioned the European Union regulation governing car emissions. We have successfully negotiated increasingly tight limits on emissions to be set for manufacturers. In answer to his question whether 130 g was the correct point at which to allow an effective exemption from first year rates, our judgment is that it is correct at present, but as we always do after every Budget, we will keep an eye on the development of engine technology. We want the incentive to remain taut. As engines become much more efficient, we will review that rate.
	The other main way of driving behavioural change and driving down CO2 emissions is through new technologies. The Government have made some significant announcements about how we wish to support the car industry through its short-term difficulties, and incentivise it to be at the forefront of the dash to innovation in energy efficiency and carbon efficiency in engine design and the design of transport generally. Despite the significant progress that has been made in engine efficiency—new cars are 30 per cent. more efficient than 10-year-old cars because of innovation and change—we must recognise that road transport still accounts for 20 per cent. of all UK emissions.
	Given that the House passed the Climate Change Act 2008—this year's Budget contains the first three carbon budgets—we have a legal duty to achieve the huge reduction in carbon emissions that Parliament set us in that legislation. One of the ways in which we must approach that is by dealing with the 20 per cent. of emissions that come from road transport. That means that we must incentivise technological change and innovation, as well as behavioural change.
	The changes in the Budget, which my hon. Friend the Member for Wolverhampton, South-West spoke about, form a coherent package to achieve that aim. It includes, as he pointed out, the changes to the tax on company cars, with lower tax for lower-carbon cars, lower rates in capital allowances for the business car regime for lower-carbon cars, and the differential rates of VED that we are discussing. Outwith the Budget process, but of equal importance, there is the £250 million of support to provide incentives for ultra-low-carbon cars, too.
	The hon. Member for South-West Hertfordshire talked about scrappage—a term that also passed the lips of the hon. Member for Taunton. The point of the scrappage scheme is not to reap environmental benefits, except in a secondary way, and we have not argued for it as an environmental measure. It is designed to try to put some confidence back into the new car market in a timely and temporary way. That is why it is time-limited—it ends in March next year—and its cost is capped at £300 million. The scheme is explicitly designed to kick-start, from a confidence point of view, the new car market.
	The environmental gains, if there are such, will be secondary and consist of the fact that new cars are more energy-efficient than older cars. Therefore, by definition, if an older car is scrapped and replaced with a new, more efficient car, there will be some minor gains. However, I shall not stand at this Dispatch Box and argue that the scrappage scheme is primarily an environmental measure, because it is not designed in that way.

David Gauke: Again, I am grateful to the Exchequer Secretary; she has been very clear with the Committee, which will appreciate the point that she makes. Taking her pointers to the environmental benefit of the scrappage scheme, I should be grateful to know whether there has been any assessment of its environmental downside, in that more cars will be bought. I appreciate that the Government have not presented the measure as principally environmental, but will she examine the environmental minuses as well as the pluses?

Angela Eagle: We may be able to discuss scrappage in more detail at another stage of the Bill. To answer the hon. Gentleman's question, however, the point of the scrappage scheme is that to qualify, a car must be scrapped, so we are talking about replacing existing cars with newer, more energy-efficient cars. Clearly, on the issue of whole-life costs, there would have to be an assessment of whether we save on the environmental costs of making new cars, and some work is being done in that area. However, I would not want the hon. Gentleman to run away with the idea that the primary aim of the scheme is anything other than to try to give a temporary, and I think much-needed, boost to a great British manufacturing sector that is in great need of support. That is the point of scrappage.
	I shall now deal with the points that my right hon. Friend the Member for Birkenhead made. His argument was hung on an amendment that has not been selected, so we shall not talk about that, except to say that it would definitely be retrospective to try to go back to engine size rather than CO2 emissions as a basis for VED. We were the first country to base vehicle excise duties on CO2 emissions, and six more European countries now do so. We have achieved major reductions in emissions from our car fleet as a result—partially, at least—of that change. It sends good signals to consumers, but we need to improve on and even increase those signals if we are to hit our very demanding targets for averting dangerous climate change. Clearly, that is something in which we all have a direct interest.
	My right hon. Friend was right, however, to focus on the distributional aspects of progress in new, greener technology, because, as the Committee on Climate Change, which the House tasked with taking a closer look at these matters, said in no uncertain terms in its report to Parliament, there are often distributional effects when we switch to lower-carbon activities. As a country and as a society, we will not be able to persuade our electorate that we need to make progress and avert climate change if we cannot also demonstrate that we have a fairness agenda. In other words, if there is no fairness for those who are poor and least able to buy new, or shift from existing goods to newer, more energy-efficient ones, we will not get public support for the changes that we need.
	My right hon. Friend is therefore right to worry about some of those issues. We have some data that hint at connections, but not in the sort of detail that he would like. Some data suggest that low-income households are more likely to own cars with smaller engines. However, the hon. Member for Taunton was right in his analysis that the poorest do not own cars, so the distributional shape of the tax is not the same as that of, for example, tobacco duties.
	We also have data to suggest that the majority of the cars that emit the most carbon are owned by higher-income households. Again, the data are not geographically well represented or spread in the way that my right hon. Friend wanted. I am happy to talk to him to ascertain whether we can analyse the distributional impact of the shift from high to low CO2 emitting cars on the engine pool, and particularly on his constituents and many of mine, who are not always known for going to the latest car showroom and getting the latest model.
	My right hon. Friend may also like to correspond with the Committee on Climate Change, which is developing some expertise in the matter, to ascertain whether it can study the issue.

Frank Field: I shall take up the Exchequer Secretary's offer and her suggestion about others with whom I might make contact. I think that our poorer constituents accept that the Government need to raise revenue, and that they raise it from drivers in different ways. However, their plea is that we take account of the total impact of all the levies that we impose on drivers when we consider the distributional effect. We hope that we will not have a Government who are not green-minded, as my hon. Friend describes this Government to be.

Angela Eagle: We try to bear the big picture in mind throughout the budgeting process. We do not consider vehicle excise duties in isolation, but alongside other duties. We then examine their distributional impact, so I hope that we can make my right hon. Friend pleased with our fair approach.
	The system of CO2 based vehicle excise duty applies to cars registered from 2001 onwards. Cars registered before then continue to pay the duty according to their engine size because we do not have comprehensive data on their CO2 emissions. Clearly, over time, the number of cars in that pool diminishes. Although engine size can act as a proxy for emissions, my hon. Friend the Member for Wolverhampton, South-West gave a few examples of perverse results. It does not, therefore, provide as accurate a measurement of emissions as that used in CO2 based VED: grams per kilometre.
	I hope that hon. Members will join me in supporting the clause.
	 Question put and agreed to.
	 Clause 14 accordingly ordered to stand part of the Bill.

Clause 16
	 — 
	Rates and rebates from September 2009

Stewart Hosie: I beg to move amendment 13, page 10, line 24, at end insert—
	'(2A) In section 6 (excise duty on hydrocarbon oil) after subsection (1A) (as amended by subsection (2) above), insert—
	"(1AA) In every Budget Statement and pre-Budget Statement the Chancellor of the Exchequer must provide a forecast for oil prices and set out anticipated yield from fuel duty and VAT on fuel for that price and for a range of prices up to 50 per cent. above his forecast.
	(1AB) The Treasury must, following each such statement, by regulations made by statutory instrument reduce the rates of duty specified in subsection (1A) in direct proportion to the increase in the costs accounted for by VAT.
	(1AC) Whenever international oil prices rise above the level estimated by the forecast made in accordance with subsection (1AA), indexed fuel duty increases shall not take effect until the international oil prices return to the forecast level or the forecast price is amended by the next Budget or pre-Budget Statement."'.

Michael Lord: With this it will be convenient to discuss amendment 11, page 10, line 40, at end add
	', provided that before this date, the Chancellor has published a report examining the costs and benefits of the introduction of an automatic fuel duty stabiliser whereby the rates set out in HODA 1979 vary inversely in comparison to oil prices.'.

Stewart Hosie: The arguments that I want to present have been reprised over many years. Indeed, I have the  Hansards of all the debates going back to 2005 and will refer to some of them. On a number of occasions when I have tried to introduce a similar measure, there have been rather different circumstances, with modest, and sometimes significant, price spiking, the consequence of which we have seen.
	In 2005, when I first attempted to introduce a similar measure, I pointed out that the price of a litre of unleaded petrol had risen by 6p over six months, to 86p a litre. By the time that we debated the issue in 2008, the price of fuel had gone up to between £1.10 and £1.30 a litre, and on some of the islands, as well as in the more remote rural areas, it was significantly more. Today the price is relatively stable at about 95p a litre and $50 a barrel. Just for hon. Members' information, in 2008 the price crashed through the $140 a barrel level.
	However, there is no certainty that prices will remain relatively low or relatively stable. Indeed, as the world comes out of recession, they might well rise. If India and China regain some of their impetus, there will be increased demand and inflationary pressures. If there is a cold European or north American winter, there will be demand on hydrocarbons and inflationary pressures. There might be supply-side shocks if there is war or terrorism in an oil-producing region, thereby causing the barrel price to rise. If we have natural disasters that take out refining capacity, which has happened before, there might be a significant price rise.
	Even without any of those eventualities, which are risks that we can identify, some future prices—for next year's delivery, for instance—are already 40 per cent. higher than those today. Indeed, I have seen delivery costs for 2015 that are more than 40 per cent. higher than those today. My judgment, which reflects comments made in previous debates, is that it is better to try to introduce a mechanism to smooth out price increases when prices are relatively low and we have relative stability than to wait until prices shoot up again. We must take cognisance of the eventualities that we can predict—we know what has happened in the past three or four years—and take action to mitigate identifiable risks, not least because we know the impact of a prices spike on families and businesses, including the haulage sector and other communities.
	In our 2005 debate on this subject, when there was a modest increase, the AA was quoted as saying that, because of the 6p increase over the previous six months,
	"individual motorists have seen the monthly cost of petrol for a typical privately owned car rise from £87.43 in January to £94.02 in May. In households with two cars this represents a £13.18 hit on family expenditure each month".
	That was a modest rise, but it was none the less significant over the piece. In that debate, we also learned that bankruptcies among hauliers were running at twice the average for other industries at that time. We must avoid that in future. Hauliers' average running costs then were 52p a mile and, as was pointed out:
	"Competition from hauliers in Europe, driven by lower fuel prices elsewhere, have led to a massive reduction in the percentage share of cross-channel freight delivered and carried by UK hauliers. The industry and, indeed, domestic car users pay some of the highest fuel prices in Europe, driven by some of the highest taxes on fuel in Europe of 69 to 74 per cent."—[ Official Report, 6 July 2005; Vol. 436, c. 361-62.]
	We can therefore see the impact that even modest rises have, in terms of additional bankruptcies in the haulage sector.

Robert Smith: On the crisis in the haulage sector, does the hon. Gentleman think that the Government's failure to get to grips with the vignette scheme and ensure a level playing field with foreign hauliers was a contributory factor to the challenge facing hauliers?

Stewart Hosie: It was, but that is wide of this issue, as is the cabotage issue, although I might refer to that later. The hon. Gentleman is absolutely right to say that although fuel costs form a massive part—more than a third—of the cost of running a haulage business, other issues can have an impact on a company's competitiveness and ability to stay in business.
	Our 2006 debate was held less than a year after the 2005 debate, but by that time the price of fuel at the pump had crashed through the £1 barrier in many parts of Scotland. There had been a 20 to 25 per cent. rise in the cost at the pump and that exacerbated the difficulties faced by families and businesses, and by the haulage sector in particular.
	We tabled similar amendments for debate in 2008, at which time the reports were quite frightening. The  Sunday Herald reported in April 2008 that, out of the average £37,000 a year that it cost to tank up a typical 44-tonne truck, the Government took £25,000 in tax. The same article confirmed that a 20-vehicle haulage business would have to make £30,000 more simply to meet its increased costs, and that was on top of the £30,000 that it had to find for increased fuel costs in the previous year. Within a few months of that report in April and our debate in July 2008, there was a price rise of more than 14p a litre, and the price of oil was expected to reach $140 a barrel.
	We know that that had an impact. When Ramage, a haulage firm, went into administration, its administrator cited the high cost of fuel as a contributory factor. Normal families running a single diesel car were facing additional costs of not £13 a month, which they had dealt with in 2006, but £30 a month. A family running two petrol cars was paying an extra £46 a month, or about £500 a year.

John Thurso: May I pick up the hon. Gentleman's point about hauliers? A number of them have introduced a fuel surcharge and, rather like the airlines, they now add that surcharge to their normal bills. However, the surcharge has not always come down in line with the price of fuel. Has that been drawn to his attention?

Stewart Hosie: It has. The price might not always come down in line with the price of fuel, but I must point out to the hon. Gentleman that many of the surcharges were put in place when the price rises were expected to be modest. They were also capped, and as the cap could not be exceeded, when the price spiked dramatically, hauliers that I know of—I name no names—made a loss.
	To bring us right up to date, we have heard about hauliers in difficulty and about bankruptcies. Ramage went bust, as did many others, and fuel costs were cited as a contributory factor. We know from previous debates that hauliers in Campbeltown were selling trucks and laying off drivers. The Freight Transport Association, citing figures released by the Office for National Statistics, tells us that the number of people seeking work as a heavy goods vehicle driver has risen from 3,280 in March 2008 to 15,000 this year. I suspect that that is because of the number of drivers who have been made redundant, rather than because a huge number are training to become hauliers at this very difficult time.
	We need to take action. We cannot mitigate all the price rises, because they occur for all kinds of reasons, including because of costs of sale and delivery, but we need to militate against the worst rises, particularly when they are driven by the barrel price of oil. I therefore propose, as I have done before, a simple measure that would oblige the Government to lay out their forecasts and to introduce a statutory instrument to reduce the duty when the price rises. The reduction would be the equivalent of the amount of extra VAT that would be gained due to the increased price at the pump. That amount could come from the VAT windfall or the North sea windfall, because it would be directly related to the price of oil.

Alan Reid: The hon. Gentleman has hit on a problem and proposed a solution, but will he enlighten us on one point? His proposed new subsection (1AB) states:
	"The Treasury must... reduce the rates of duty",
	but it does not specify the times at which the Treasury must do that. Would it happen every month, every day, or every six months?

Stewart Hosie: I left that open-ended and simply referred to a statutory instrument because I wanted the provision to be practical and workable. It has been argued that the reductions could not be made hourly or daily—or, I concede, perhaps not even weekly. None the less, there must be a mechanism, and the statutory instrument would determine the most appropriate one. It must be responsive without being excessively bureaucratic—it is vital to get the balance right.
	Proposed new subsection (1AC) would provide that when the oil price spiked, the normal indexed rises would be automatically cancelled. Decisions on whether to postpone or proceed with an indexed rise should be no longer left to a political whim, but based on the needs of the population, industry, families and the haulage sector.
	According to the Federation of Small Businesses, which conducted a poll after the Budget, 80 per cent. of small business men whom it consulted estimated that even the 2p rise in fuel duty would have an adverse impact on their businesses. Its national policy chairman said:
	"Small businesses...the engine room of the...economy...have been choked by the Budget...with increases in fuel".
	How much worse would it be for business if the price suddenly spiked above the 2p rise?
	The chief executive of the Road Haulage Association has said:
	"Many of Britain's road hauliers face being priced off the road by foreign competition benefiting from the new open market for haulage but fuelled with diesel hugely cheaper than can be bought in the UK."
	He added:
	"We cannot understand why the Chancellor has turned a deaf ear to our industry's pleas".
	The Road Haulage Association in Scotland has said:
	"At this challenging time the last thing the haulage industry in Scotland needs is an increase in costs. More so now that the cabotage regulations have been relaxed making it easier for European hauliers with lower costs to compete in the UK domestic market...The case for a regulator is as strong now as it ever was".
	We think that amendment 13 represents the right approach and I hope to press it to a Division. As for amendment 11, although the Conservatives have historically resisted its proposals, they changed their minds last year. Their amendment uses different words, but its fundamental objective is the same: not the mitigation of all price rises, but the smoothing out of the spikes. They propose a two-way regulator, whereas mine is open. In other words, they propose reductions in duty when the price rises and increases when it falls. I am relaxed about that, because the purpose is to deliver stability.

Alan Reid: The hon. Gentleman refers to a two-way regulator, but although his proposed subsection (1AB) in amendment 13 contains the words "reduce the rates", the amendment does not make any reference to increasing the rate.

Stewart Hosie: I would leave the statutory instrument to decide that. As I have said, if the SI were to opt for a two-way regulator, I would be perfectly content, because this is about stability, not about who wins political points. As I said in last year's debate, when the Conservatives changed their minds, I do not care whether we have a fair fuel stabiliser, a fuel duty regulator or the version proposed by the hon. Member for South Thanet (Dr. Ladyman), a former Transport Minister. We need to finalise a deal with families, hauliers and businesses to smooth out price spikes so that we do not experience the shocks to the system that we encountered in 2005, 2006 and 2008.

Jeremy Browne: I think that the hon. Gentleman should deal with the previous intervention in slightly more detail. He seems keen to give the impression that his amendment would benefit motorists and that, by and large, it would lead to them paying less duty. When it is pointed out to him that they might pay more in some circumstances, he is quick to say that all that will be dealt with by a statutory instrument and that we need not consider it at great length now. However, there is a real possibility that if we vote for his amendment, we will be voting for all our constituents to pay more for their fuel than they would otherwise.

Stewart Hosie: I have said four or five times that this is about stability, certainty and smoothing out the unexpected spikes that are so damaging. I know that there are Liberal Democrat Members who have supported that concept in the past. I know that there are others who have more difficulty because of their alleged green policy. If the hon. Gentleman—I say this kindly—wants an excuse not to vote for the amendment, he can have one, but I am putting forward a proposal that is gaining support from other parties. It was massively supported in the real world last year. I hope to press the amendment to a Division. With the greatest respect, I hope that he can see his way to support it, because his constituents would benefit from it.

The Second Deputy Chairman: I now have to announce the result of a Division deferred from a previous day. On the Question relating to the Equality Bill carry-over, the Ayes were 331 and the Noes were 136, so the Ayes have it.
	 [The Division list  is  published at the end of today's debates.]

David Gauke: It is a pleasure to follow the hon. Member for Dundee, East (Stewart Hosie), who rightly set out the concerns that exist about wanting to smooth over the oil price spikes that have an impact on our constituents as petrol and diesel prices increase. I say at the outset that Opposition Members support the objective of ensuring that a greater proportion of taxation is raised by environmental taxes, and fuel duty is the key, principal environmental tax that we have in the United Kingdom.

Angela Eagle: I wonder whether the Conservative party still supports the idea that that increase in money from green taxes should be put into a separately audited family fund, which was the original announcement?

David Gauke: We want to reduce the tax burden on good things and we would pay for that by increasing the tax burden on bad things. We think that the proportional shift needs to be moved on to carbon and pollution. I am sure that the Minister will be delighted to learn that details of our policies will be made clear in due course.
	We recognise that fuel duty is an environmental tax, that it is going to play a part in addressing carbon emissions and that it raises a great deal of revenue for the Exchequer. We do not in any way dismiss it, but we also recognise—I think hon. Members on both sides of the Committee do—that there are times when fuel duty causes considerable pain to our constituents. It does hurt.
	We have already heard references to particular groups and rural areas. I know that we will be debating this matter at greater length later, but rural areas particularly feel the pain of higher fuel prices. We know that hauliers feel the pain. All of us can recall, especially those who were in the House at the time—I was not—the hauliers protest in 2000.

Jeremy Browne: In 2001.

David Gauke: We have a dispute, but I think it was 2000. We also know that in the summer of 2008 there was a great deal of concern about fuel prices.
	In recent years, the Government have lacked a clear framework on how fuel duties should be raised. They continued the fuel escalator that was brought in by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), but that in turn had to be abandoned when it was no longer sustainable. Having stepped on and then off the fuel escalator, there have been times when the Government have announced a fuel duty increase only then to postpone its implementation. At other times, they have introduced unexpected increases, as we see in clause 16 and the announcement to move back on to the fuel escalator with substantial increases in fuel duty both before and after the next general election.
	The problem with the Government's position is the lack of a framework, which is why we opposed their Budget resolution measures. Essentially, we think that the Government policy on fuel duty is unsustainable in the sense that it is not possible to bring along public support unless the oil price remains low. In a period during which the oil price rises, there is a distinct risk that the strength of public opinion will lead to any Government feeling under great pressure to abandon the fuel escalator. We will then be left once again in a period in which there is no stability or certainty about the direction we are going in.
	We share the objective of the hon. Member for Dundee, East of trying to address what we should do when there is a spike in the oil price. Our proposal is the fair fuel stabiliser. The intention of amendment 11 is to ask the Government to review how this policy could be implemented, just as we are doing in consulting on the issue. In essence, what we are looking for is a mechanism whereby when fuel prices go up, the fuel duty will fall, and when fuel prices go down, fuel duty rises. It is not a blinding revelation to state that fuel prices hurt people when they are at their highest, and that is when the political pressure in respect of fuel duty is at its greatest. There are a number of advantages of going down this route.

Alan Reid: As the hon. Gentleman well knows, the price of fuel was considerably lower at the time of this year's Budget than at the time of last year's Budget. Therefore, if this fuel stabiliser had been introduced last year, how much higher would the price of fuel at the pumps be now compared with the actual current price?

David Gauke: I will not give precise figures, as we are consulting on this. The principle the hon. Gentleman puts forward is absolutely right, however: when fuel prices fall, the duty will increase. It will not do so to the extent that the actual fuel price will increase; it will just not fall as much. Equally, when fuel prices are rising, there will still be an increase, but not by as much. This is a stabiliser, but it is not an attempt to fix a price—so that it shall be 97p a litre for ever more, for instance. The price will still vary, but we will smooth out the bumps. I think that that is an objective that the hon. Member for Dundee, East has set out. We have also identified it as a laudable objective, and we think that there is a practical way of achieving it.

Robert Smith: What the hon. Gentleman is identifying is the fact that fuel duty is a very crude method of sending an environmental message to motorists. Does he think that, in the long run, the best way of smoothing this out and sending that signal to motorists will be to move towards introducing road user pricing, not fuel duty, as a mechanism? That will also deal with the rural and haulage issues, as well as the level playing field issues.

David Gauke: I note the hon. Gentleman's point, but I am focusing today on fuel duty. I think we can address that in the short term. There are various issues to do with road pricing, and it needs to be looked at in more detail. I do not want to go too far down that road—whether it is priced or otherwise. I take on board his point, however.

Angela Eagle: The hon. Gentleman is talking about smoothing out bumps, which I am always in favour of doing, especially when I am doing my ironing. Will he tell us a bit about where he would set the baseline, because that is important? If one is smoothing out the bumps, one has to have a place where one thinks the price is reasonable, and that is a very difficult area of this entire debate. We all have to remember that we are dealing with a very volatile commodity price.

David Gauke: The Exchequer Secretary makes a good point; one of things that we have asked in our consultation is where and how one sets that baseline. It is possible to find a baseline that recognises where the burden falls on the motorist and what an acceptable level is. That is not an insuperable difficulty.

Stewart Hosie: I agree that it is not insuperable. Once the baseline is identified, the real key is the ability to reset it at regular intervals. One of our suggestions was that at the Budget and the pre-Budget report the ticker could be reset, so that if we found that there was a structural increase, the baseline would be reset, whereas if we found just a cyclical change or a spike, it might not need to be reset. The timing is as important as the baseline figure.

David Gauke: The hon. Gentleman makes a good point. I agree that there needs to be flexibility on the baseline and that it needs to be reviewed regularly, but that in no way undermines the stability that could be brought to fuel prices. The stabiliser has a number of advantages. Leaving aside the big advantage that it protects the public from spikes in oil price, it helps price stability as a whole. Fuel prices can contribute to inflation significantly, so the stabiliser would assist the Monetary Policy Committee of the Bank of England in ensuring that its attempts to target inflation were not affected by volatile international markets.
	We have some difference with the Scottish National party on how we would pay for and justify our approach. The hon. Gentleman makes the case in his amendment that the Government benefit from increased VAT when oil prices increase and that that windfall can be used to reduce fuel duty. I am sure that the Exchequer Secretary will make the point—that, in itself, does not make it wrong—that consumers then spend less on other things. With an increase in the VAT revenue obtained from fuel, there tends to be a decrease in revenue from other areas. However, there is a link with North sea oil production and the revenue that comes from it. When oil prices fall there is a shortfall in that duty, but when they rise there is an increase in that duty, as the numbers for the past couple of years show. In 2008-09, the revenue from North sea oil increased by 66 per cent. when oil prices were increasing, whereas the revenue will halve for 2009-10—at least that is the Treasury's estimate—as oil prices fall. That is what happens when fuel prices move in opposite directions. Thus, we believe that over a cycle—over a reasonably long period—this proposal would be revenue neutral, and that we can do things in a more cautious way. The proposal would provide stability to not only personal finances, but the public finances.
	The environmental case is that if the price of carbon were stabilised, it would be easier for businesses to plan ahead. Environmental taxes work most effectively when they are kept stable—a point made by the Stern review—and there are no risks of fluctuations in the marginal costs that could increase the total cost of any mitigation policy. As far as our carbon emission target is concerned, it would be beneficial to have a mechanism ensuring that we were not quite so dependent on volatile international oil markets.
	Finally, some 20 businesses cover 99 per cent. of fuel sales. They should be able to administer a fuel stabiliser, and we want the Government to investigate whether that would be practical. Consultation would be needed as to how that would work precisely—for example, how frequently it would need to be reset, as the hon. Member for Dundee, East mentioned.
	This proposal could be a useful addition to the fuel duty structure—

John Thurso: The hon. Gentleman has not touched on the differential in price in remote areas. How would his stabiliser help those people who are paying 14p, 20p or even 25p more a litre than those in metropolitan centres?

David Gauke: We will turn to the issue of remote areas in the next debate, and I see that the Liberal Democrat Benches are filling up, as they traditionally do at this point in deliberations on the Finance Bill— [ Interruption. ] My hon. Friend the Member for Poole (Mr. Syms) will have to spread out a little.

Alistair Carmichael: Is the hon. Gentleman saying that the Liberal Democrat Benches are filling up because this is an issue about which we care? Should we infer from the state of the Conservative Benches that this is an issue about which the Conservatives do not care?

David Gauke: I think that we should infer that this is an issue on which many Liberal Democrats will be sending out press releases to their local press. I suspect that many Conservative Members will be sending out press releases on amendment 5—

Robert Syms: My hon. Friend should take the lack of support as a sign of confidence in his ability to command the Committee.

David Gauke: I am very grateful for that intervention and I am sure that my hon. Friend speaks not only for himself, but for the party as a whole.
	We urge the Government to investigate the fair fuel stabiliser with a view to implementing it. Their approach to fuel duty has been ad hoc and haphazard and there is a lack of certainty about where we will be in future. To some extent, the Government are reacting to fuel prices and pursuing a fuel stabiliser policy almost by default—when fuel prices fall, they are bolder in their increases, but when fuel costs rise they hesitate to raise duty. That is understandable, but we think that such decisions should be made within a proper framework. It would be good for inflation targeting, public finance stability and the environment. I hope to have an opportunity to press amendment 11 to a Division.

Jeremy Browne: Thank you, Sir Michael, for giving me the opportunity to speak on this group of amendments. I echo the concerns expressed about the difficulties faced by motorists and businesses when fuel prices rise and when they are high, as well as about the impact on businesses of other higher commodity prices. It is advantageous to businesses and individuals if budgets can be planned in advance; price volatility makes it harder for any individual or organisation to plan to such a level.
	I have sympathy for the hon. Member for South-West Hertfordshire (Mr. Gauke). I know that he instinctively believes in free-market economics, yet he has been overruled by people in his party who have required him to come here and give us a sort of reheated 1970s form of socialism. He made a good attempt to argue for it. He said that the Government arrangements were ad hoc and haphazard, but that is called the free market. He seems to want prices to be determined not by supply and demand but by the wisdom of the shadow Chief Secretary to the Treasury. That is not the intellectual case that the Conservative party has made for the past 30 years.
	The Conservatives say—this is essentially the point made by the Scottish National party, too—that oil price variants are potentially problematic, which is why they would introduce a fair fuel stabiliser. However, when food prices vary or are volatile, that can be problematic for consumers or businesses. A huge increase in the price of milk or bread has an impact on the bottom line of a catering business, so I look forward to the Conservatives' fair food stabiliser. What about the effect on businesses when energy prices vary or when gas or electricity prices go up? That will have an impact on nearly all businesses, but it will have a profound impact on those that are particularly energy intensive. When will the Conservatives introduce their fair energy stabiliser? The truth is that they regard those matters as less politically sensitive and, as a result, they do not have stabilisers. That is not because of intellectual coherence, but because they think that it is not electorally expedient.

David Gauke: The distinction is very clear. The majority of the cost of fuel is a duty of tax, but the same does not apply to food or energy. We are not trying to set a price that everyone must sell at or intervening in the contractual relationship between a buyer and a seller with some sort of price policy. We are simply varying that element that is within the Government's control—the duty—depending on what we think individuals and businesses can bear.

Jeremy Browne: In that case, I look forward to the fair alcohol stabiliser that the Conservatives will no doubt introduce in due course when the core ingredients of beer, for example, go up, as commodities do in the market place.
	Both the Conservatives and the Scottish nationalists are extremely coy about the downside of their proposals. I noticed that the hon. Member for Dundee, East (Stewart Hosie) said that the purpose of amendment 13 was to smooth spikes in oil prices. What he did not say—I can only infer that this must be the case—was that he would also smooth out the troughs: that is, that he would put prices up. Otherwise, he would not be smoothing out anything at all. There has to be a downside as well as an upside. The Conservative spokesman, using almost exactly the same language, said that his amendment would smooth out the bumps. That is the difference between the SNP and the Conservatives; the Conservatives deal with bumps, not spikes. Presumably, he would also smooth out the dips at the same time.
	My hon. Friend the Member for Argyll and Bute (Mr. Reid), with characteristic diligence, has done some more research into the effects of Conservative party policy. I must admit that I look forward to the Conservatives distributing leaflets on the issue in my constituency—as Michael Ashcroft put so much money into their endeavours, they must be able to afford to do so. Let me run through the effect of their policy. This is not a party political point—it is central to amendment 11.
	According to the average UK fuel prices published on the AA website, at the time of last year's Budget, March 2008, a litre of unleaded petrol cost 106.8p. It cost 118.2p in June, when the House had the opportunity to vote on the Budget proposals. The price rose by 11.4p between the Budget and the vote in the House, which allowed the shadow Chief Secretary to the Treasury to say that the fair fuel stabiliser would cut the cost of petrol by 5p a litre.
	However, with his characteristic generosity, my hon. Friend the Member for Argyll and Bute said that he had calculated the saving to the motorist of last summer's Conservative party policy at 5.7p a litre. That seemed very popular, and people asked me why the Liberal Democrats opposed the policy. They said that the rises in prices were extremely unpopular, and that the Conservatives seemed to have reached a brilliant conclusion. They seemed to know better than the market, and to have an electoral advantage in pursuing that option.
	Unfortunately—and this is the twist—petrol prices started to fall rather dramatically just as the Conservatives chained themselves to their policy. I am again indebted to the research done by my hon. Friend the Member for Argyll and Bute, who showed that the price of a litre of unleaded petrol had fallen, according to the AA website, to an average of 90.6p by March 2009. A fall of 16.2p since that year's Budget was dramatic enough, but the fall from the peak of the market was close to 30p. That peak roughly coincided with the period when the Tories were championing the fair fuel stabiliser most energetically in this House.
	What would be the impact on motoring if amendment 11 were agreed to? I have done a calculation, and I am afraid to say—this will come as a shock to hon. Members across the Committee—that the amendment would impose a crippling rise in duty on every motorist in the country.
	The Conservatives may have keen environmental reasons for wanting to increase petrol prices so markedly but, if they do, I do not understand why they should be so coy about them. I hope that the hon. Member for South-West Hertfordshire will tell us why his party is not selling the policy with vigour, because I am about to explain what its impact would be.
	As I said, at the time of last year's Budget, a litre of unleaded petrol cost 106.8p, but that had fallen to 90.6p by March 2009. If amendment 11 had been in operation at that time, it would have brought about an 8.1p increase in fuel duty. To be fair, the Government raised fuel duty by 2p in December 2008 and by a further 1.84p in April 2009, so it seems only reasonable to take those rises away from the figure that would otherwise form the basis of the calculation. If a provision equivalent to amendment 11 had been passed last year, motorists would have had to pay an extra 4.5p, approximately, for a litre of unleaded petrol over and above what they in fact have to pay at the pump at present.
	That would have been the impact of the Conservative amendment. One could call it smoothing out the bumps, or putting up the price of petrol for motorists across the country. The Scottish National party has a variant on that, and it is perfectly honourable for both parties to take that approach, but they should be explicit about their intentions.

Michael Weir: My hon. Friend the Member for Dundee, East (Stewart Hosie) made it clear that the object of the exercise was to get rid of spikes in prices. Does the hon. Gentleman understand how the haulage industry works? The fact that hauliers use long-term fuel contracts that cannot reflect price spikes has caused many companies, especially those in rural areas, to run into difficulties. The hon. Gentleman mentioned food stabilisers, but in Scottish rural areas—such as my constituency or the areas represented by the hon. Members for Argyll and Bute (Mr. Reid) or for West Aberdeenshire and Kincardine (Sir Robert Smith)—everything comes by road because there is no alternative. As a result, fuel price rises feed through to ordinary goods, hitting shops, pubs and every small business in towns and villages throughout our constituencies. Stabilisation will get rid of the massive spikes in fuel prices, and the difficulties associated with them.

Jeremy Browne: I completely accept the hon. Gentleman's point on the haulage industry and the costs added to other goods, but my point is that the stabiliser does not just smooth out the spikes. That is what is so disingenuous about the claims made for amendments 13 and 11. If he had intervened to say, "The measure will smooth out the spikes but, to be honest, we—the SNP—will tell hauliers that, if there is a drop in prices, we will require them to pay more than the market rate," I would understand it. That would be a perfectly noble and fair policy—it might even be revenue neutral. However, the Conservatives and the SNP cannot argue one side of the equation and not the other—well, they can, but not in a way that is intellectually compelling.
	For a party such as the Conservatives, who, when they are addressing business audiences, claim that they believe in free market economics, it is not intellectually consistent to say in the House of Commons that free markets are far too "haphazard" and, in fact, Government know best. That is intellectually dishonest. It is honourable to tell the electorate the consequence of policy, and the consequence if the amendments are made today will be that motorists pay more for their driving. By our calculations, they will pay approximately 4.5p per litre more, and that—

Stewart Hosie: Will the hon. Gentleman give way?

Jeremy Browne: I am bringing my remarks to a conclusion.
	That would have a serious impact on motorists. It is only reasonable that the parties point that out in this Committee and to our constituents.

Angela Eagle: We have had a most illuminating debate. I shall add to the questions that have been well put by the hon. Member for Taunton (Mr. Browne) about the other side of the Conservative policy, which has not been the subject of press releases or announced with all the fanfare to which the original proposal was treated, when it was calculated that a 5p cut in fuel duty would be the result. I wonder why we do not see similar press releases when, as oil prices fall, the policy would result in increases in duty. I have seen no press release boasting about that, or front-page newspaper coverage of how the Conservatives would put fuel duty up—by 4.5p, if their so-called fuel duty stabiliser is applied to the current oil price.
	I have to acknowledge the persistence of the hon. Member for Dundee, East (Stewart Hosie), who has been raising this matter since long before I arrived on the Treasury team as Exchequer Secretary—and he has the  Hansards to prove it. We certainly congratulate him on his persistence. The Conservatives were latecomers to the party—quite late, given that they voted against the hon. Gentleman's amendment to the same effect to last year's Finance Bill. They were converted, perhaps on the road to Damascus, but certainly on the way to Report stage, when the mathematics looked good. They produced their consultation document, but since then, everything has gone terribly quiet. The Conservative consultation closed in December, but no consultation summary has been produced and no further announcements have been made.

Jeremy Browne: Does the Minister agree with my observation that the moral of the story for Opposition parties is that they cannot be governed solely by the need to put out good press releases? They must also come up with intellectually robust policies, which would work in practice and in office.

Angela Eagle: I could not agree more with the hon. Gentleman. When the press release looked good, it was generalised into a policy, which featured in Report stage of last year's Finance Bill. That was followed by a consultation, but then—funnily—everything went quiet because the oil price started to plummet, which the Conservatives were not expecting. With prices going only in one direction—down—their arithmetic looked rather difficult. It is interesting to note that this year, unlike last year, we have an amendment that asks us to produce the information needed to justify the Opposition's policy. Presumably, the Conservatives' consultation paper has come up with some of this, although we have not been allowed to see the results and we have had no further announcements even on how this policy has evolved, if I may put it that way, in the interim as the oil price continues to plummet.
	The fact that the oil price has done something unexpected—something that perhaps could not have been predicted at the height of the spike last year—shows precisely the problem with seeking to take the volatility out of what is, after all, a commodity that is traded in a completely free market and has notorious price fluctuations. They are always very difficult to predict with any degree of certainty. Oil prices can be affected by sudden events—weather events, political instability in a particular area and a whole range of other things. It is very difficult to stabilise something so volatile.

Jeremy Browne: I am grateful to the Minister for her brilliant lecture in free market economics, which I am sure will be beneficial to the Conservative Front-Bench team. Is it not also important to acknowledge that, at the time it happens, it is hard to know whether one is dealing with a spike or a broader trend that may or may not come to represent a spike retrospectively? We keep hearing about spikes, but at the time, one does not know whether it is really a spike or part of a long-term trend.

Angela Eagle: That is right. I dare say that even Nostradamus could not tell whether a spike was a spike or part of an ongoing upward or downward trend.
	That brings us on to important issues about how on earth a baseline could be set and what behavioural effects it would produce. I want to go into some detail here, as these issues keep coming back and many of the practical difficulties with such proposals are skated over by those who make them as if they were really not a problem. I submit that they are.
	Before I do so, however, let me say on free market economics that there are very few even socialist theorists who would suggest that commodity prices were somehow controllable—certainly not on the global level—as the Tory Front-Bench team now seems to want to suggest. I particularly enjoyed hearing the observations of the hon. Member for Taunton about the range of stabilisers that might be forthcoming if this particular approach to world commodities were to catch on.
	Amendments 11 and 13 are designed to make provision for a new fuel stabiliser or regulator mechanism that would reduce the main fuel duty rate when international oil prices exceed their forecast levels. One has to think about what those forecast levels would actually mean in this context. In amendment 13, the hon. Member for Dundee, East seeks to establish a system directly, while in amendment 11, the Conservative Opposition have suddenly become much more coy than they were last year: they ask us only to prepare a report, rather than having the courage of their convictions in the consultation paper and actually tabling a specific amendment to the Finance Bill. We have not seen such an amendment, so I detect a retreat from the direct implementation of their fuel duty stabiliser policy as it was announced last year. It has now become a meek request for us to prepare a report rather than being a direct amendment to the Finance Bill.
	Both the amendments argue that such a mechanism would stabilise fuel prices at the pump by offsetting the impact of oil price fluctuations, but the mechanism is based on the incorrect premise that the Government receive a revenue windfall from high crude oil prices, which can be used to make up the difference in Exchequer revenues as fuel duty revenues fall. In fact, such a mechanism would destabilise the public finances—the opposite of the intended effect—by producing wild swings in duty rates, and pose significant administrative problems to both the Government and fuel producers.

Stewart Hosie: How can the Government determining to spend some of the revenue yield have any impact whatever on fuel producers? The argument is wholly spurious. The proposals have no bearing on fuel producers whatever.

Angela Eagle: First, I will deal with the point about the so-called windfalls, which do not exist. Secondly, the hon. Gentleman's mechanism is about VAT, but the other mechanisms under discussion are, as far as we can tell, about the income we purportedly get from North sea oil when prices rise.

David Gauke: May I read to the hon. Lady paragraph C.46 from the Red Book? It says:
	"The surge in oil prices up to mid-2008 is reflected in North Sea revenues of £12.9 billion in 2008-09, up 66 per cent on the previous year."
	The next paragraph states:
	"North Sea revenues are expected to almost halve in 2009-10."
	To use her expression, that is wildly fluctuating, but it is fluctuating in the opposite direction to fuel duties. We argue that the two can be balanced out.

Angela Eagle: I will explain why that is not the case, and why the proposal will produce perverse results. When oil prices rise, the premise is that the Government receive a windfall from either increased North sea tax revenues or greater revenues from VAT on fuel. As I argued last year, however, that is not the case. Although high oil prices might push up revenues from North sea oil taxes, there is no automatic link, as the significant increase in costs for oil companies that accompanied the last price spike showed. The impact of high oil prices on the wider economy means that the increase in North sea revenue is offset by falling revenues elsewhere for the Government. Lower GDP growth and higher energy costs reduce the yield from income and corporation taxes, while higher fuel prices lead to lower fuel consumption and lower revenues from fuel duty. For example, in 2008-09, when oil prices reached record highs in the summer, fuel duty receipts were £300 million below their 2007-08 level. In that sense, there is no windfall.  [Interruption.] It is easy for Opposition parties to spend windfalls, but they do not exist as net windfalls for Government revenues, as I have just demonstrated.
	Turning to VAT and the alleged windfalls that form the basis of the Scottish National party's regulator mechanism, high fuel prices at the pump do not produce an overall increase in VAT receipts. When consumers have to pay more for fuel, they tend to buy less of other goods, thereby paying less VAT elsewhere. To prove that, in 2008-09, when crude oil prices and fuel prices reached record levels, total VAT receipts were almost £2 billion below their 2007-08 levels. Again, Opposition parties are trying to spend windfalls that do not exist in net form for Government receipts. They are trying to attach automatic mechanisms that would oblige us to spend windfalls that we do not have. Such distortionary effects on public spending would do great damage and achieve the opposite of stability—volatility, with large, sudden holes in public finances, which could be avoided without such mechanisms.
	As well as that fundamental objection to the principle of the fuel duty regulator, there are also serious practical problems with its implementation. Under the proposed Scottish National party mechanism, the Chancellor would produce at each Budget an oil price forecast for the coming year, which would act as what is described as a baseline price. Fuel duty rates would be reduced when oil prices rose above that baseline, and would rise when oil prices fell below it. We should take a bit of time to focus on how important the baseline—and the amount at which it was set—would be. It would have a real effect on tax duties, yet it would be very subjective.

Jeremy Browne: I am fascinated by the process by which the Minister thinks that the baseline would be arrived at. Is it something about which Lord Hattersley, or other people with expertise in Government intervention from the 1970s, would be able to advise the Conservative party?

Angela Eagle: I suspect that Gazprom, or some of the more centralised old Soviet planners, might be able to take a view on the correct baseline for oil. I must confess that I do not know how one could set that baseline, other than very subjectively. What would be a fair baseline price? The process of determining the baseline would be likely to be highly arbitrary, and therefore open to frequent challenge. The Government would have a constant incentive to set the baseline higher, and motorists and other organisations would call for it to be lower, because that would have an effect on whether prices went up or down.
	Last summer, the Opposition appeared to suggest that the Budget forecast should be used as a baseline, but as is well known, oil prices can be volatile and difficult to predict. I suspect that if the Conservative party had predicted oil prices, and had known what was to come, it would not have released its press release and developed its so-called fuel duty stabiliser. It is certainly indisputable that in recent years, forecasts of the price of oil have been subject to wide margins of error. In Budget 2008, the average of independent forecasts, which is what we use for the Red Book, was just below $84 a barrel, yet within four months of last year's Budget, oil prices had reached a record peak of just over $146 a barrel. Another four months later, by the time of the 2008 pre-Budget report, oil prices had fallen by more than 60 per cent. to below $50 a barrel. After further fluctuations in the first few months of this year, on Budget day 2009, the Brent crude price closed at $49.81 a barrel.
	According to information from the Conservatives outlining the policy for their so-called stabiliser mechanism, a $6 per barrel shift in the crude oil price would result in a 1p per litre adjustment to the fuel duty rate, yet as my right hon. Friend the Chief Secretary pointed out on the subject last year—she is here, listening to the debate with great interest—crude oil prices frequently moved by more than $6 a barrel in a single day. In the past year, the oil price moved by more than $12 a barrel on five occasions in the course of a week.
	Instead of a change being triggered by a $6 difference in the oil price, one could, I suppose, adjust fuel duty at certain set points throughout the year, as the Conservatives originally suggested, but there would then be a significant risk of a market distortion. If the crude oil price were to be regularly compared against the baseline price, it could offer oil traders incentives to bid up the oil price before each assessment date, in the hope of artificially engineering a lower fuel duty rate. Gaming takes place when there are such things to predict and bet against, as I am sure the hon. Member for South-West Hertfordshire (Mr. Gauke) knows.
	Speculation that the duty rate was about to change as the assessment date approached could encourage forestalling activity to avoid duty, producing yet further instability. Overall, frequently changing the rate could impose significant additional administrative burdens on fuel producers.

Jeremy Browne: I am interested in this point, because amendment 11 asks the Chancellor to undertake research. As the Minister rightly said, the report from the official Opposition has been suppressed, and it is now the task of the Treasury to try to undertake that research. Can she give me an assessment of the cost of undertaking that research, and tell me what the administrative burdens will be on retailers, specifically petrol retailers, who might find it impractical if the price is adjusted every single day as a consequence of the stabiliser? Such retailers may also find that the system has a detrimental impact on employment.

Angela Eagle: Depending on how the so-called stabiliser was applied, those would clearly be important issues. I look forward to seeing the results of the Opposition's consultation, where they will no doubt set out these issues out in great detail so that we can make an even more detailed judgment of their policy.
	Fuel prices do not immediately alter following adjustments in the oil price. If fuel duty were altered on a monthly or bi-monthly basis, it would be highly unlikely to result in a constant fuel price, as oil prices often rise and fall at very short notice. If the stabiliser were to alter on a six-monthly basis, it might not respond to oil spikes at all.
	For example, imagine that in 2008 the Budget oil price forecast of $84 a barrel had been used as a baseline, but the fuel duty rate was adjusted only every six months, on 1 April and 1 October, say. On 1 April 2008 the Brent price was $100 a barrel, but on 1 October 2008 the Brent price was $95 a barrel, so had a stabiliser been operating on a six-monthly basis, it would barely have changed, yet we would have had the huge spike in the middle, with no response to it whatsoever. That is a funny definition of stability, or lack of bumps, so to speak.
	Even that is an optimistic reading of what the Opposition have proposed. A close reading of pages 3 and 4 of their consultation document, which they put out last July, suggests that their so-called stabiliser might be based on fuel prices rather than oil prices, which is another odd way of doing it. If we were to interpret the Opposition's proposal in this way, today's average petrol price figures quoted from the same source as they used, PetrolPrices.com, would mean that the fuel duty stabiliser would put an immediate 5.5p on the price of unleaded fuel. If such a mechanism were introduced in the future, there would be potential for significant gaps in the public finance forecast.
	It is clear that these proposals are populist. They would not work in practice, they achieve the opposite of what they claim on the tin, and they do not achieve stability at all. They achieve unreliability and great volatility. I therefore hope that the House will vote against them.

Stewart Hosie: The Minister has spoken for some time. In her usual generous way, she explained the Government's position carefully. At the beginning she spoke about persistence. That is correct. We recognised that there is a problem. She also criticised the concept, and at one point spoke about trying to manipulate commodity prices. The price of oil, the commodity, may drive the policy, but there is no attempt at all to manipulate the commodity price. The amendment is designed to smooth out the price at the pump as a consequence of movements in commodity prices.
	The Minister also spoke about VAT. We have not spoken of a VAT windfall. We have spoken of a value equivalent to the increase in VAT, which would be generated by an increase in the price at the pump. That is a perfectly reasonable measure to use.
	The hon. Member for Taunton (Mr. Browne), who speaks for the Liberals, made a number of spurious claims. He ignored the ability to reset the baseline, which was vital. He chose a starting point for his example which, if not random, was certainly chosen to—

Alan Reid: Will the hon. Gentleman give way?

Stewart Hosie: No. I am criticising his hon. Friend.

Alan Reid: It was my calculation.

Stewart Hosie: If it was the hon. Gentleman's calculation, he should have known better. I am going to rush through this quickly.

Robert Smith: Will the hon. Gentleman give way?

Stewart Hosie: No. Sit down.

The Second Deputy Chairman: Order. The hon. Gentleman must remember that it is my task to decide whether hon. Members are allowed to stand up or sit down in the Chamber.

Stewart Hosie: Thank you, Sir Michael.  [Interruption.] The hon. Member for Argyll and Bute (Mr. Reid) indeed chose a rubbish starting point.
	I recognise that, as the Minister said, the price cannot be fully stabilised. The argument is that it is simply smoothed out. The Government's other argument was that it would be difficult to determine whether a change was a spike or a structural change in the price. The whole point about setting regular dates when the measure would be revisited—and about allowing for that flexibility—is to ensure that we identify whether there is a real spike, an upward trend or a systemic or structural change to the price.
	We need to do something about the issue and take action. I have heard the criticisms and arguments from the Exchequer Secretary and her hon. Friends, because she, too, has been persistent for many years. However, in the absence of a Government alternative or, even, any recognition of the real difficulties for families, businesses and hauliers, I beg leave to press my amendment to a Division.

Question put, That the amendment be made.
	 The Committee divided: Ayes 15, Noes 310.

Question accordingly negatived.

Alan Reid: I beg to move amendment 5, page 10, line 39, at end insert—
	'(8A) After section 14F insert the following—
	"14G Remote rural fuel discount scheme
	(1) The Treasury shall by regulations provide for the introduction, by no later than 1 April 2010, of a remote rural fuel discount scheme.
	(2) The purpose of the scheme is to provide a rebate on road fuel duty at qualifying retail outlets in qualifying areas to reduce the premium paid for fuel in such areas over the national average.
	(3) Qualifying retail outlets under subsection (2) are outlets located in qualifying areas meeting any criteria as defined under subsection (4).
	(4) Qualifying areas are remote rural areas as may be defined by regulations under subsection (1).
	(5) Regulations under subsection (1) may—
	(a) specify the amount of the fuel duty rebate;
	(b) define 'remote rural areas';
	(c) define qualifying retail outlets, including any restriction;
	(d) specify how the rebate is to be applied, including—
	(i) authorising HMRC to define procedures and conduct audits, and
	(ii) how any administrative costs are to be defrayed;
	(e) provide for it to be an offence for a person fraudulently to supply or sell rebated fuel other than as proscribed by these regulations;
	(f) provide for a system of registration of eligible retail outlets; and
	(g) provide for the scheme to be administered in Scotland by the Scottish Executive, in Wales by the Welsh Ministers and in Northern Ireland by the Northern Ireland Executive.".'.
	I am delighted to move amendment 5, which stands in my name and that of several of my hon. Friends. Hon. Members will notice that this amendment is similar to amendments that have been tabled by hon. Friends on the Liberal Democrat Benches in previous years, and I make no apology for returning to the subject this year. The aim of the amendment is to tackle the continuing unfairness of the fuel premium that drivers have to pay in remote rural areas. This serious problem has a severe impact on the economy of those areas on the mainland and on all our islands.

Angus MacNeil: The hon. Gentleman will be aware that, in constituencies such as mine and his own, we pay more tax per litre of fuel than in any other part of the United Kingdom. That anomaly should not continue, and a fuel duty regulator is urgently needed by our island communities so that our taxes can be fair, equal and level across the country.

Alan Reid: The hon. Gentleman is absolutely right to say that his constituents and mine pay more tax on our fuel than people in the rest of the country. The way to tackle that is through the proposal in our amendment for a rural fuel discount.
	People who live in remote rural areas suffer a triple whammy on their fuel. First, by necessity, they have to travel long distances. Secondly, the price of fuel is higher than in urban areas. Thirdly, there is a complete lack of public transport. The premium that people in remote areas have to pay for their fuel varies. I will give some examples that compare the prices in my own constituency with those charged in Glasgow. Close to the eastern boundary of my constituency, which is closer to Glasgow, the price tends to be 1p or 2p a litre higher than it is in the city. Moving to the furthest part of the mainland from Glasgow, the price differential around Campbeltown, down at the tip of the Kintyre peninsula, was 6p a litre more than in Glasgow the last time I checked. The price tends to be even higher at some of the small filling stations in the more rural parts of the mainland.
	On the islands, the price differential in Rothesay on the Isle of Bute was 5p a litre when I checked recently. That is bad enough, but the price differential becomes far larger on the Atlantic islands. On the larger islands such as Mull and Islay, the price of fuel is usually about 15p a litre higher than in Glasgow, and as much as 30p higher on smaller islands such as Coll and Colonsay. That price differential, which has to be paid by local people going about their ordinary daily lives and by local businesses, makes daily life and running a business much more difficult in those areas.

Angus MacNeil: I am grateful to the hon. Gentleman for giving way again; he is most kind. When I first raised this issue with the Treasury three years ago, I was told that if a fuel duty regulator such as that proposed in the amendment was brought in for the islands, people would travel from places such as Glasgow to buy fuel in Stornoway, Benbecula or Barra. That was clearly nonsense, and the hon. Gentleman's proposal represents at least a step towards the kind of parity that is sadly lacking at the moment, as we can see from his figures.

Alan Reid: The hon. Gentleman is absolutely right. The Treasury has certainly used that argument in relation to the mainland, although even Treasury Ministers have not tried to argue that that would be the case for the islands. I will describe later how that supposed pitfall can be overcome on the mainland. Clearly, no one would pay the extortionate fares charged by Caledonian MacBrayne to go to the islands in my constituency.

Angus MacNeil: It has got better with RET and the SNP.

Alan Reid: The hon. Gentleman is tempting me, but he knows perfectly well that the Scottish Government treat my constituency much less fairly than his. However, I shall return to the subject of the debate before you intervene, Sir Michael.
	In remote areas, the car is an essential, not a luxury. Let us consider the purpose of the high fuel duty. One argument that the Government put forward is that it is designed to encourage people to change their behaviour and to use public transport instead of their cars. However, that fails completely in remote rural areas because of the complete lack of public transport alternatives. No environmental purpose would be served by local councils in remote areas subsidising more buses, because they would be running with only one or two passengers, and a couple of passengers on a bus are clearly a great deal less environmentally friendly than people using a car.

John Thurso: Is my hon. Friend aware that Royal Mail, in its pre-privatisation mode, has slashed post bus services in many of our constituencies? As a result, there are now no post buses, and no bus services of any kind, on the north coast of Scotland.

Alan Reid: Royal Mail is also removing two post bus services in my constituency, on the islands of Colonsay and Lismore, thus causing more difficulties for local people and visitors alike.
	To add insult to injury, as well as paying a higher price for their fuel, people pay more to the Exchequer in tax because the higher price means that VAT is higher as well. A basic principle of taxation is that it should be equitable, but it is clearly not equitable for an area to pay more VAT than is paid in other parts of the country. What makes the position even more perverse is that fuel costs are lower in areas with public transport alternatives than in areas with none.

Daniel Rogerson: My hon. Friend is making a strong case. As he has pointed out, a key element of the problem is that it is harder to run businesses and other services in some rural areas. Although some may view such areas as prosperous, wages are often very low, and the economy is under threat for all sorts of other reasons.

Alan Reid: I am not sure whether my hon. Friend has been reading my speech over my shoulder, but I was about to make that very point. In the highlands and islands, incomes are much lower than in the rest of the country, but the Treasury is asking people there to spend far more on fuel and to pay more tax on it. Fuel represents a greater share of disposable income in the highlands and islands in the first place.
	The purpose of amendment 5 is to identify a workable solution to the problem: reducing the premium that people are paying for their fuel in remote rural areas. On previous occasions, the Chancellor and other Treasury Ministers, including the Exchequer Secretary, have expressed sympathy and a desire to look at the evidence. As a result, my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) produced a paper, a copy of which I have with me. My hon. Friend circulated the paper, sending it to, among others, the Chancellor, and the amendment is based on it.
	Scottish national statistics include what is described as the eightfold urban-rural classification, which is shown on a map in my hon. Friend's paper along with the definitions. I understand that similar definitions exist in other parts of the United Kingdom. The Treasury could use various classifications depending on exactly where it wanted to target the scheme, but in Scotland I should prefer it to include all the islands as well as two of the mainland classifications: very remote rural areas with a population of under 3,000 and more than a 60-minute travel time to a settlement with a population of over 10,000, and very remote small towns with a population of between 3,000 and 10,000 and more than a 60-minute travel time to a settlement with a population of over 10,000. Other definitions could be used, however, and the amendment allows the Treasury to define the area to be covered by the scheme in regulations.
	So it is perfectly possible to define the area to be covered by the scheme, but we also need—and the amendment provides for—a simple method of passing the tax rebate through the system. To do that, we need only designate the retail filling stations. Different filling stations would be eligible for different levels of discount depending on where they were situated. Obviously, a far higher discount would apply on islands than on remote parts of the mainland.
	All motorists using those filling stations would benefit, whether they be locals, tourists or people visiting on business. The scheme works for all of them. If we agree that retail petrol stations are to be designated, all that will then be required is a robust system with an audit trail to ensure that the rebate is passed to the consumer and is accounted for in a way that ensures that there is no fraud. My hon. Friend's paper uses the VAT system to ensure that. There are details in the paper. I will not go through them all today but that paper has been made available to the Treasury and was circulated to any hon. Member who was interested. The paper provides for a robust audit to ensure that the rebate arrives at the pump and benefits the motorist at the pump.
	In previous discussions the major criticism that Treasury Ministers have always made of the scheme is on the issue of cross-border exploitation. They expressed the fear that motorists might cross a border to get cheaper fuel, but those who know the geography of remote rural areas—

Michael Moore: I wish  The Telegraph did.

Alan Reid: As my hon. Friend says,  The  Daily  Telegraph clearly does not. That perhaps indicates that people based in London often do not understand the daily problems of life in the highlands and islands of Scotland.
	The fear has been expressed that someone might cross a border to get cheaper fuel.

Alistair Carmichael: I think that the point about borders needs to be nailed down. In my case, if someone is to cross the border to get to Shetland, it is going to require a 12-hour ride on a ferry from Aberdeen, and the petrol would probably still be more expensive than in Aberdeen. How many people does my hon. Friend think are likely to cross that border?

Alan Reid: The answer is zero. No one is going to take the ferry from Aberdeen to Orkney or Shetland to benefit from cheaper fuel. The same would clearly apply to any ferry journey. Even with the cheap ferry fares to the Western isles that people can pay now, it would not make sense for anyone to travel there for that reason, and certainly not in the case of the extortionate ferry fares that the Scottish Government charge to my constituency.

Robert Smith: If the amendment were passed, at least the tourists who travelled to that area would face the same costs as they would if they chose to be a tourist elsewhere in the country. It would be fairer for the economy of the area in developing its potential as a tourist destination.

Alan Reid: My hon. Friend makes an important point. At the moment, tourists are often put off returning to remote rural areas. When they get there, often they express outrage at the cost of fuel and say that they will not come back, despite the beautiful scenery. As for the islands, there is no argument that the scheme could be defrauded.

David Drew: The hon. Gentleman is making a good point. Does he accept that one of the problems for those of us who represent rural areas is that petrol companies already offer a highly differentiated system of charging to individual garages or petrol stations. I would want some assurance that those petrol companies would operate with total transparency, so that we then knew what they expected motorists to pay. In my area I have one garage, which just happens to be within the area of Cheltenham, that is able to offer fuel at a much lower cost than that charged by every other local garage, and that cannot be fair.

Alan Reid: The hon. Gentleman is right and I thank him for that intervention. The paper that my hon. Friend the Member for Caithness, Sutherland and Easter Ross has written goes into such charging in detail and makes it clear that there must be a detailed audit trail to make sure that the discount is passed on to the motorist at the pump.
	As for the mainland, attempts to commit fraud there would be similarly impractical. The important point about our scheme is that the fuel discount would be set at such a level to reduce the extra costs that motorists are paying at the pump compared with urban areas, but it would not eliminate them entirely. Therefore, the price of fuel would still be slightly higher in remote parts of the mainland than in urban areas but the current obscenely large differentials would cease to exist. As a result, there would be no point in a motorist travelling a long distance—from Glasgow up into the highlands, for instance—to buy fuel, because it would still cost them more in the highlands than in Glasgow. However, those travelling to remote areas would benefit in any case, and tourists would be more likely to return rather than being put off from doing so by the current high fuel prices.
	In the amendment, proposed new subsection (5)(g) provides for the Treasury, after it has agreed to the scheme, to devolve it and permit the Scottish Government, Welsh Assembly Government and Northern Ireland Executive to operate it in their own jurisdictions.
	This workable scheme tackles a genuine and serious problem—remote rural areas suffer from high fuel prices, and have no public transport alternatives. It is clearly ridiculous and unfair that people in those areas pay more tax on their fuel than people in urban areas. The amendment would right an obvious wrong, and I urge the House to support it.

David Gauke: I am grateful to the hon. Member for Argyll and Bute (Mr. Reid) for tabling this amendment. Such discussions are, it is fair to say, a regular event for those of us who have dealt with a few Finance Bills; indeed, I sometimes wonder whether it is a constitutional obligation that we debate a remote rural fuel discount scheme during our deliberations on the Finance Bill. Such debates provide a good opportunity for some Members to highlight what is clearly an important issue for the areas that they represent—the higher fuel prices that their constituents experience. I also recognise that in many remote rural areas public transport is very limited. Some people work in areas where using their own vehicles is a necessity—and they are very often vehicles that are not as efficient as others, because they are dual-purpose. For those reasons, it is understandable that Members should wish to highlight this issue.
	I have some concerns, however; again, I think it is part of the routine on these occasions for both the Government and the party aspiring to government to raise one or two practical concerns, and I shall do so during the course of my brief remarks. One thought that crossed my mind is that, essentially, what the hon. Gentleman and the other supporters of the amendment—including those on the Liberal Democrat Front Bench—want to do is manipulate the price paid at the pump in order to bring down the price in remote rural areas. I do not support that idea, because the way that such things are done is by reducing tax, but—unless I am missing something—based on the logic of what we heard in the previous debate, presumably there are some who think that this is an attack on the free market. As I have said, that is not my position, but I look forward to hearing the comments of the hon. Member for Taunton (Mr. Browne).

Alistair Carmichael: rose—

David Gauke: I shall give way to the hon. Gentleman. I am not sure whether he was present for the previous debate, but if he was, he will have heard that any attempt to lower the price paid at the pump is an attack on free markets.

Alistair Carmichael: I was present for the contribution of my hon. Friend the Member for Taunton (Mr. Browne); in fact, I am distraught that the intervention I made on the hon. Gentleman himself had so little impact that he has forgotten it already. What I wish to say to him now, however, is that there is a distinction to be drawn between a properly operating free market, which is what we were talking about earlier, and a failed market, which is the case with fuel prices in the highlands and islands. Does he agree with his colleague in the Scottish Parliament, Alex Johnstone, who in a debate a few weeks ago, said:
	"I assure members that we are not opposed in principle to the proposal in the motion"—
	that is the same principle and the same sort of proposal as is before us today—
	"and will not oppose it."—[ Scottish Parliament Official Report, 30 April 2009; c. 16931.]?

David Gauke: First, I seek the hon. Gentleman's forgiveness for failing to remember that he made an intervention that, on second thoughts, I realise was memorable. Secondly, we will not oppose the amendment, just as we have not opposed this proposal in any of the previous years when it has come up. We are not persuaded by the amendment, so we shall abstain—assuming that the hon. Member for Argyll and Bute presses it to a Division—but that is consistent with the comments made by my friend in Scotland.

Jeremy Browne: I am being provoked by the hon. Gentleman. Is there not a distinction between believing that it is not suitable to set oil prices for the whole country in a Whitehall Department, which is what I understood him to be arguing in the previous debate, and this amendment, which recognises that additional costs are incurred in sparsely populated areas? The same recognition applies to the greater sum given per pupil to small primary schools in remote rural areas because of the lack of critical population mass. That is nothing to do with free markets; it is just a realisation of the difficulty in providing for low-density populations.

David Gauke: I do not want to go back over the whole of the previous debate, but I do not accept the hon. Gentleman's contention that our policy on the fuel stabiliser was about setting a price. I do not think that having a rural fuel discount undermines the free market; that is not my argument. I simply think that some of his comments do not make it entirely easy to distinguish between those two things.

David Drew: The hon. Gentleman will have heard my earlier intervention. The problem in rural areas is that this is not an argument about a discount; it is an argument about a premium that monopolistic petrol companies can exact, not only in isolated rural areas but in all rural areas. There is no competition, because those companies set whatever price they set, and people can do nothing about it. I have talked to countless proprietors of petrol stations and they tell me that there is no negotiation and no competition, because they are set a target and that is what they have to face. That is unfair.

David Gauke: The hon. Gentleman is on to a very important practical point—which is also one of the potential difficulties with any kind of rural discount, because of course price is set by supply and demand. Whatever discount we provide on the fuel duty the supply will essentially be the same, and it will be one calculation. That is a practical point that is well worth considering.

Angus MacNeil: The argument here is about equitable taxation. There are two parts to the taxation on a litre of fuel—duty and VAT. The argument for our rural fuel derogation is that it would ensure that the higher tax being paid in such areas was reduced, so that the tax was equitable—or at least as close to equitable as we could get it—across the UK, instead of people in rural places, particularly islands such as those that comprise my constituency, paying more tax on a litre of fuel than anyone anywhere else in the UK.

David Gauke: I can fully understand the hon. Gentleman's concern, and he is right to press this particular case. I anticipate that the Minister will make the following point, but I shall bring it into the debate a little earlier than I intended. Other products have regional variations in price —[Interruption.] Well, the VAT applies at the same rate, but may I briefly discuss the example of alcohol? The price of a pint of beer is considerably higher in London than in some other places. The argument that can be made— [ Interruption. ] Let me complete my point. I am not making this argument in my capacity as a Member of Parliament for Hertfordshire, where beer prices are higher than in some other parts of the country. One could, however, make the argument—to follow it to its logical extreme—that people pay more for beer in London and the south-east, so the taxation system should provide a London discount. I hasten to add that I do not advocate that approach, but it is a point worth addressing.

Danny Alexander: Does the hon. Gentleman realise how offensive the comparison that he has just drawn is to my constituents? Petrol is a necessity of life in the highlands. I come from an area where a car is a necessity, not a luxury. People can choose whether to drink a pint of beer according to their own preferences: the ability to get in their car and drive to work is a necessity. I hope that the hon. Gentleman will withdraw that comparison, because it is grossly offensive.

David Gauke: I would be surprised if the good people of Inverness were quite so easily offended— [ Interruption. ] I dare say that hon. Members are composing their letters to the newspapers already. We heard last night from the hon. Member for Taunton about the importance of the alcohol industry, but of course alcohol is not a necessity in the same way as petrol. However, if hon. Members are arguing that there should be no regional variations in prices, we run into difficulties. I appreciate that there are particular difficulties with fuel prices in rural areas, and they can form a large part of an individual's expenditure, but it is only reasonable to point to regional variations in other goods, too.

John Thurso: I wish to assist the hon. Gentleman on the reaction that he may anticipate in tomorrow's papers. The point that he is making was made from the Dispatch Box by a former Economic Secretary to the Treasury three years ago, and there was outrage. The hon. Gentleman has, sadly, reprised that ill-advised comment, and that will probably result in similar outrage in the  John O'Groat Journal and Caithness Courier.

David Gauke: I appreciate that part of the routine of these occasions is for hon. Members to contact their local press as this matter is about to arise. Then the Government and the official Opposition raise one or two gentle queries about whether the policy is necessarily workable, and that is treated as highly offensive.

Alistair Carmichael: The hon. Gentleman has misrepresented the situation. He said that Liberal Democrats thought that there should be no regional variation in prices. That is manifestly not the case, as I suspect he knows. The argument is being made, first, that this is a special case because fuel is such a pressing necessity in such areas. Secondly, the regional variation in fuel prices is now extreme. In the most densely populated parts of my constituency, petrol is about 15p a litre more than it is on the mainland. Will the hon. Gentleman address those points, instead of setting up false premises in order to knock them down?

David Gauke: The hon. Gentleman is quick to take offence. I am merely seeking to tease out some of the arguments that hon. Members are making. I merely raised the issue of other regional variations, and I am grateful for his acceptance that there will always be regional variations. Perhaps I can best describe the position of those who tabled the amendment by saying that they are trying to iron out some of the spikes. That is a perfectly understandable objective.
	Let me turn to the technical points. When this issue is raised every year, it is striking that very little detail is set out as to what constitutes a remote rural area. I know that that matter would be decided under regulations, but further detail would be helpful— [ Interruption. ] For the benefit of the  Official Report, I should say that a map is being held up on the Liberal Democrat Benches. We have heard no details about what the population of such an area would be, or the land mass— [ Interruption. ] I am hearing comments from a sedentary position, but there is nothing in the amendment other than a statement that regulations will specify the details. There is nothing for the Committee to rely on.

Angus MacNeil: May I help the hon. Gentleman by suggesting that one definition that could be considered would be "land surrounded by water"? That would be quite a simple area to define.

David Gauke: rose—

Greg Hands: The whole country is that!

David Gauke: As my hon. Friend points out, the whole country is surrounded by water. I think that I understand where the hon. Member for Na h-Eileanan an Iar (Mr. MacNeil) is coming from: obviously, his constituency is a place surrounded by water. I do not know whether, if he put that definition to all hon. Members in the Chamber, they would accept it—but I suspect not. We are faced with an amendment that does not give us the details. We do not have an estimate of what the costs would be. We will not oppose the amendment, but, as it still represents a largely unknown quantity, hon. Members still have some way to go to persuade us to support it.

David Heath: I want to speak mainly so that I can demonstrate that this is not purely a Scottish issue, despite the eloquent proposition put forward by my hon. Friend the Member for Argyll and Bute (Mr. Reid). This matter affects rural communities across the country, albeit in different ways, although it is demonstrated in its most extreme form in the sort of communities represented by my hon. Friends who have already contributed to the debate. That is particularly true for the island communities and the very remote areas in Scotland where the population density is extremely low.
	I want to impress on the Committee the problems that each of our rural areas have due to the premium on fuel, as has been demonstrated by the hon. Member for Stroud (Mr. Drew), and the necessity to use cars to carry out normal business. It is quite impossible for people in my Somerset constituency to use public transport to get to work because there is simply no system that allows them to do so. In my village, there is one bus a week. A person cannot ask their employer if they can attend only once a week, on the day that the bus runs, and expect to hold down a job. That shows the difficulty for people in my area. Of course, most couples and even families have to go to several destinations, because there is not one place that is a convenient provider of employment to which people can drive from a village or a very rural area. That means that some families need several cars—certainly two, and sometimes more—to allow their members to get to work or school, or to carry out all aspects of their normal lives.

Roger Williams: My hon. Friend is making a point that I was going to raise. Even when their incomes are low, families in rural areas need two cars because there is no public transport. That means that their dependence on petrol is even greater than that of more affluent families.

David Heath: Absolutely. Another factor in the sort of areas that my hon. Friend and I represent is that income is well below the national average, and the result is that the vehicles that people use are often older and less efficient. A statistic—it might not still be correct—has suggested that the number of cars per household was higher in Somerset than almost anywhere else in the country, and that those cars were also the oldest, because people generally kept one or two old bangers to get them to their various destinations.
	As income in rural areas is low, the price of fuel makes up a much higher proportion of weekly outgoings. People are therefore hit by an additional burden every time fuel duties or prices go up. Such rises have a disproportionate effect on the rural population and on the way in which people in rural areas carry out their business. There is also an indirect effect: it costs more to send delivery vans to local shops and stores. In every way, there is an economic disadvantage that has the price of fuel as a major determinant. The amendment, to which I am a cosignatory, is an attempt to address that basic economic injustice.

William McCrea: Does the hon. Gentleman accept that his argument also applies to people in Northern Ireland? Wages there are also low, and there is no appropriate or widespread public transport system in the Province.

David Heath: I am sure that that is true, and I have observed what the hon. Gentleman has described in many parts of the Province. The problem spreads across England, Scotland, Wales and Northern Ireland, as interventions on even my brief comments have shown.
	Although we need to address the economic injustice that I have described, we must also deal with one undesirable outcome of an otherwise desirable policy. I think that we all strongly support the idea that, to help to tackle climate change, we must try to reduce our reliance on cars and our use of fuel. We understand that, but the principle that that can be achieved by adding to the cost of fuel works only if there is a viable alternative. In rural areas, there is no elasticity in the system, because there is no alternative, so raising fuel prices does not encourage people to use their cars less. Instead, it merely encourages them to use more of their wages to carry on as before, which is entirely the opposite of what happens in conurbations and areas with public transport. I strongly believe that we should use fiscal means to discourage car use in areas in which an alternative is available, but it is essential that we accept that such a policy cannot and will not work in rural areas where that alternative is not available.

John Thurso: My hon. Friend eloquently makes the point that using taxation to change behaviour is simply a punishment if there is no way in which that behaviour can change.

David Heath: My hon. Friend is absolutely correct. He will remember that last year, when we were debating the retrospective change to VED, it was argued that, although there was a strong case for using a VED differential, by making it retrospective we would not be changing behaviour—we would simply be taxing the individual more. That was the argument then. Now, the argument is that if the aim is to achieve environmental goods, there are ways to do that, but if a measure does not achieve an environmental good, it simply becomes yet another form of taxation affecting a part of our community that can least afford it—the poorly paid people in rural areas whom we represent.
	The solution offered by amendment 5 is elegant in many ways. Rightly, not all the detail is written into the amendment. There is supporting material, as my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) says, but more definition is required. Arriving at some of the definitions will be quite difficult, especially for an area such as mine, where the population distribution and density are very different from those found in the highlands and islands of Scotland. It is by no means straightforward to translate the intention behind the amendment into reality in parts of England such as my constituency, but the argument is one that we have to make—and we have to make it repeatedly—because the present system is unfair to people in rural areas. It is particularly unfair to the highlands and islands, but it is also unfair to parts of the south-west. We should recognise that it is unfair to the whole of England, Wales and Northern Ireland.

Danny Alexander: It is a great pleasure to follow my hon. Friend the Member for Somerton and Frome (Mr. Heath), who eloquently set out precisely why the measure proposed in the amendment would be of great benefit to people who live in remote and rural areas.
	First, I shall attempt to answer some of the points made by the hon. Member for South-West Hertfordshire (Mr. Gauke), because I do not believe that they should be allowed to pass unrebutted. I am sure that others will do the same, perhaps with more humour, but let me have a go. He said at the start of his speech that this subject comes up every year—that it is a hardy perennial. There is a good reason for that: it is a matter of great importance, especially to those of us who represent a part of the country that is in many ways very different from the rest of the country. If he wants the debate to cease, he could assist by encouraging his hon. Friends to vote in the right direction and helping us to persuade the Minister to accept our proposal. If the scheme were allowed on to the statute book, there would be no need to have this debate next year and in subsequent years.

David Gauke: The hon. Gentleman is being uncharacteristically tetchy. As I acknowledged, we have this debate regularly because of the genuine concerns shared by a number of Members. However, every year the Liberal Democrats offer proposals that are pretty sketchy, and they cannot convince many other hon. Members of their case.

Danny Alexander: Our proposal is not sketchy. It is well thought through and carefully analysed. Although I do not want to steal his thunder, I may say that it was set out in the paper that my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) prepared last year and circulated—including to Conservative Front Benchers, so the hon. Gentleman has had the opportunity to study it.

Alistair Carmichael: Does my hon. Friend not think it significant that every year, we hear Conservatives' accusations of sketchiness, but year after year, they never feel motivated to do anything themselves to add more detail?

Danny Alexander: My hon. Friend makes an important point. If the Conservatives wanted to support such a measure, they could produce one that they thought would be workable. They have failed to do so over the many years in which Liberal Democrat Members have proposed such measures—

Angus MacNeil: Not just Liberal Democrats.

Danny Alexander: Indeed, Members of other parties have made proposals. The intervention from the hon. Member for South-West Hertfordshire suggests a complete absence of desire on the part of the Conservatives to produce a measure of their own. It also suggests that they are out of touch with the reality in constituencies such as mine, which those of us who come from the north of Scotland—and, I am sure, those from other rural areas—see as characteristic of his party.
	My hon. Friend the Member for Argyll and Bute (Mr. Reid) has eloquently set out the problem that this measure is intended to address, if not fully resolve. Let me add to his evidence some perspective from my own constituency. First, it is worth setting the amendment in context, and an important aspect is that the cost of fuel has clearly been rising even over the last three or four months. The figures given in the AA's fuel prices report show that since January this year, the average price of a litre of petrol has risen in Scotland by 8.6p in comparison with 8.4p across the UK.
	These increases have a much more dramatic effect in constituencies such as mine and those of other Members who have spoken in the debate. For example, in Dalwhinnie in my constituency, a litre of diesel—for the benefit of the hon. Member for South-West Hertfordshire, I am afraid I do not have the figures for a pint of beer—is 109.9p, compared with 99.9p in Edinburgh. A litre of petrol is 101.9p in Fort Augustus, compared with 92.9p in Edinburgh. In Carrbridge, also in my constituency, a litre of petrol is 102.9p, which is 10p more than the equivalent price in Edinburgh. Members representing island constituencies have rightly stressed that the differentials are even more severe in the island areas, but the point I want to emphasise through these examples is that there are severe differentials in mainland areas of the highlands, too.

Angus MacNeil: On a point of information, I add that in Stornoway today, the price for a litre of petrol is £1.03, and diesel is £1.13. I hope that that provides further context for the prices that the hon. Gentleman mentioned.

Danny Alexander: I am grateful for that intervention, as that evidence reinforces my case. I could provide further examples from my constituency, but I believe that I have already made the point.
	Alongside the higher costs, we need to consider the impact of not only fuel duty, but VAT. The fact that the price is higher means that, as well as paying more for their fuel, people are paying more VAT. It is not just that the individual faces higher costs; the Treasury is then reaping more benefit from the misfortune of the people who have no choice but to pay these higher prices. That provides yet another reason for those on the Treasury Bench to look positively on these proposals.
	Apart from the cost of fuel, this problem is highly burdensome to my constituents. As a matter of course, people living in the highlands and islands and other rural parts of the country have much longer distances to travel. I mentioned Dalwhinnie; someone living there who chooses to commute to work in Inverness faces a daily round trip of about 120 miles—a substantial fuel cost by any measure. It is also worth saying that anyone living in Dalwhinnie who wants to go to a supermarket faces a 60-mile round trip. Just obtaining the basic necessities of life, quite outside the work environment, necessitates a long journey, and in other constituencies the distances can sometimes be even greater. Many tens of thousands of miles can be involved for people just to commute back and forth to work and to go about their daily business—it is not in any way unusual.
	My hon. Friend the Member for Somerton and Frome eloquently addressed the third element of the triple whammy of additional costs and pressures in relation to fuel for those who live in remote, rural areas: the availability of public transport. For those who live in Dalwhinnie, there is no local bus service—there is an occasional Citylink coach service, but that requires a two-mile walk on to the main A9 roadway. My hon. Friends who have driven up and down that way from time to time will know that walking from the village to the motorway in any conditions other than the most clement is not ideal. In Carrbridge, there is no local bus service, and in places such as Fort Augustus and Drumnadrochit, a bus every two hours would be regarded as a high-frequency service.
	Such frequency or availability of public transport provides people with no realistic alternative to car use for necessary journeys. That is why I said in an intervention that in places such as the highlands and islands, using a car and filling it with fuel is not a luxury but a necessity; it is the only way people can go about their usual business. As my hon. Friend the Member for Argyll and Bute observed, environmental incentives in fuel duty can apply only when a genuine choice or alternative is on offer, and for many of my constituents that is simply not the case. For such people, the environmental incentive argument for fuel duty is not right.
	The case for the measure that we propose is accentuated by the current economic situation. We have seen a 75 per cent. increase in unemployment in the Highland council area, and many costs are increasing. For example, on price differentials, the latest rural Scotland price survey showed that food was 11 per cent. more expensive in rural areas covered by Highlands and Islands Enterprise than in urban Scotland.  [Interruption.] As my hon. Friend the Member for Caithness, Sutherland and Easter Ross rightly observes from a sedentary position, part of the reason for those excess costs is the impact of the fuel price on transporting those goods to village shops and individuals. People are affected not just by the cost of journeys, but by the cost of goods and services.

Michael Weir: Is there not another corollary: many businesses based in rural areas face higher costs in getting their goods to market? That has a knock-on effect on businesses in rural areas and the attempt to keep employment there.

Danny Alexander: The hon. Gentleman is absolutely right and makes an important point. The issue affects more or less every business in my constituency and, I am sure, in his. The disproportionate cost of fuel has a knock-on effect on businesses and customers. I will not stray from the matter under discussion to talk about the effect on parcel delivery charges, for example, but that is another bone of contention—a hardy perennial perhaps. People rightly feel strongly that the excessive parcel charges they must pay are not justified by the fuel price, and that that does not begin to cover the differential. Hon. Members will be aware that research by Highlands and Islands Enterprise shows that fuel accounts for 18 per cent. of the costs of people living in the highlands and islands, compared with 13 per cent. across the country as a whole. That goes some way to show the substantially greater economic burden on the rural communities that I and others represent.
	The merits of our proposal are many, and I will not develop all of them at length, although I am sure that the paper written by my hon. Friend the Member for Caithness, Sutherland and Easter Ross could be read into the record if that was felt necessary. First, the proposal offers a clear route forward to applying the principle that we are trying to set out. The Scottish Executive's eightfold urban-rural classification scheme provides a ready, well worked out, carefully thought-through basis on which to apply a discount. English MPs will know that Natural England has produced a similar—it is not precisely the same—classification for England.
	I differ slightly with my hon. Friend the Member for Argyll and Bute in that I think that the discount could usefully be applied to three of the categories. I would add to the two that he mentioned the category of remote rural—areas with a population of fewer than 3,000 people, within a 30 to 60-minute drive of a settlement with a population of 10,000 or more. Even if those three groups in the classification were included within the scope of the application of the proposal, it would still mean that areas lived in by roughly only 3 per cent. of the population of Scotland would benefit from it.
	It is worth placing it on record that although the scheme would benefit many of the rural areas in my constituency, the large city of Inverness, which has slightly higher prices than other parts of the country, would not be a direct beneficiary. Last year, I was involved in protracted but successful negotiations with Tesco to persuade it to reduce its petrol price in the city of Inverness, so Inverness has benefited in other ways from Liberal Democrat Members' efforts to reduce the cost of fuel. The scheme would not directly benefit the city of Inverness, but it certainly would benefit the rest of the rural highlands and islands. There is some merit in the suggestion made by my hon. Friend the Member for Argyll and Bute, that starting the scheme in island areas would be a good way to establish the principle and check for fraud and so on—issues that he rightly addressed, but on which I do not intend to focus. That would be a good way of starting the ball rolling.
	There are established international precedents for our proposal. Indeed, a derogation from the European Union's energy products directive explicitly allows member states to have differential levels of fuel duty. That power is already exercised by the Governments of France, Greece and Portugal. Each of them has chosen to use the measure to benefit geographically remote, sparsely populated areas that they consider sufficiently important to merit use of the power for their benefit. There is no legal barrier to the United Kingdom Government using the same power—

Alistair Carmichael: Just a political one.

Danny Alexander: There is just a political one, as my hon. Friend says. Indeed, I understand that UK Ministers supported the power to vary fuel duty in the Council of Ministers. I fail to see why, having done so, our Ministers cannot find a way to apply that power in the UK for the benefit of the remote and rural communities of this country. The derogation in the directive allows a maximum differential of 3.54 euro cents on a litre of petrol. Those who follow exchange rates carefully will know that that currently amounts to about 3p per litre. That would make a difference, although perhaps not enough of a difference in many areas. There is a strong case for lobbying, and working within, the European Union to increase the size of the differential allowed. None the less, a differential is allowed.
	The measure is fair because the benefit is targeted at a small but important group of people who suffer as a result of a particular unfairness under the current system. The hon. Member for South-West Hertfordshire implied that anyone interested in government would not support the proposal; I think that anyone interested in governing the country fairly would support it, and that is why Liberal Democrat Members— [Interruption ]—and the whole country support it. Liberal Democrats from not just the north of Scotland, but across the whole United Kingdom, support it. It is proposed not just on sectional, regional grounds, but on the basis of fairness; we think that the measure is the right thing to do for the country as a whole.
	Of course, the current economic circumstances reinforce the reason why the measure is important for the country as a whole. It would support an economic stimulus in the highlands and islands. The point has been made that it is not just local people who would benefit from the reduction proposed in the amendment, but tourists visiting the area. Tourism is an important part of the economy in parts of my constituency. In areas such as Badenoch and Strathspey, it is thought to be about 80 per cent. of the economy. Clearly, the measure would help to reduce tourists' costs, and would also help to increase tourism spend in what is already a very popular tourist destination—

Angus MacNeil: And increase tax revenue.

Danny Alexander: It would therefore potentially increase tax revenue, too; that is quite right. It is worth saying that the cost of the measure would be very low.

Angus MacNeil: As I said a moment ago in a sedentary intervention, there would be increased tax revenue from greater economic activity. The measure might be revenue neutral or create a larger tax take for the Exchequer, which should probably be grasped with both hands by the Minister.

Danny Alexander: The hon. Gentleman indulges in economic forecasting. There is reason to believe that the measure would bring some benefit by increasing economic activity, reducing the burden on small businesses, putting more money in people's pockets that they could then spend on other things, and supporting the tourism industry. All those things are potentially revenue generators that would help to defray, if not completely offset, the cost of the measure.
	I recall that last time we debated the measure, the cost was estimated to be in the region of £20 million to £40 million a year. The lower of those estimates is not dissimilar from the pension pot for Fred Goodwin that was waved through on the nod, without a moment's consideration, by one of the ministerial colleagues of the Exchequer Secretary, who is not listening. As I understand it, after a brief phone call, the noble Lord Myners decided that a £16 million pension pot for the Royal Bank of Scotland's ex-chief executive was fine. We are discussing a measure that costs—

Sylvia Heal: Order. The hon. Gentleman is straying quite a way in the rural areas mentioned in the amendment.

Danny Alexander: I am grateful for that guidance, Mrs. Heal. The point that I was seeking to make in the context of the overall Government spending of many billions of pounds on an economic stimulus and by highlighting one individual commitment that was entered into by a Minister was that it should be a matter of great ease for Treasury Ministers to support the scheme. It is low cost, simple and fair; it has a strong international precedent; it is the right thing to do; and I urge the House to support it.

Michael Weir: I shall be brief. We on the Scottish national party Benches will support the amendment tonight, despite the disgraceful failure of the Liberals to support our excellent amendment on the previous vote. We are very forgiving people.
	The hon. Member for Somerton and Frome (Mr. Heath) made a good speech and very good points about public transport. When I travel on the train from London to Montrose, I can get a bus from Montrose to Brechin, where I live. That is relatively easy. Recently, my trusty old Honda—that should be rusty old Honda now; I shall certainly go for the Government's scrappage scheme—was in the garage, and I found myself having to get from my home to my offices, which I found difficult.
	One of my assistants who lives in Brechin travels to my office in Arbroath. He cannot get in for 9 am, despite those being two of the larger towns in the county. He has to go via Montrose on the bus to Angus college because that is the only public transport available. It is extremely difficult for people to travel around by public transport, even within the main towns. Outwith the main towns, up in glens of Angus—I am sure it is the same elsewhere—there is little or no bus service. Even the intercity buses that travel between the cities will not stop in many of these areas, so one has to make several connections to get to, say, Dundee or Aberdeen. There is a real problem with the few alternatives to public transport, which is why cars are so important in rural areas.
	The hon. Member for Somerton and Frome also made an important point about the price of petrol and about petrol stations. In Brechin, there is now only one petrol station, which is attached to a small Tesco store. On the main road that runs from Dundee to Aberdeen, there is another petrol station, but its prices are astronomical because it has a captive audience, so to speak. The map that the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) produced is very interesting and shows the area that the scheme would cover. Very little of my constituency—only the remoter glens—falls into that area, but that in turn produces another problem. People living in those glens require the benefit of the proposed scheme, but there are no petrol stations.
	One point that has not come out of the debate so far is that petrol stations have disappeared from many rural areas. People have to get in their cars not only to go to supermarkets and to commute to work, but to find a petrol station, because they simply do not exist in many areas any more. Many small, independent rural petrol stations have gone—effectively driven out of business by the majors. In my constituency, one will be lucky to find a petrol station that is not run either by Shell or Esso. I believe that there is one Mobil station left, but that is it; the independents have gone. Even under the proposed scheme, there would be a potential difficulty with persuading petrol stations to become involved.
	The proposed scheme is good and important, but I have some queries about the wording of the amendment and, for the first time in my life, agree with the hon. Member for South-West Hertfordshire (Mr. Gauke), because proposed new section 14G(5)(c) states that regulations will "define 'remote rural areas'". I understand that point, and papers may be available elsewhere, but I have a horrible memory of serving on the Committee that scrutinised what became the Energy Act 2004. In it, there was a wonderful power defining the area where it would be possible to cap charges for renewable energy. Everybody assumed that that area was the highlands and islands of Scotland and gaily passed the legislation, but we then found that it was not; it was only some of the islands of Scotland. That has been a source of contention ever since, so there is a danger in not defining exactly what one means by "remote rural areas".
	I must accept that, apart from the glens, most of my constituency does not constitute a remote rural area. There are difficulties, however, and people in those areas would have to go to other areas to find petrol in the first place. Defining "qualifying retail outlets" would also be a problem because of the lack of such outlets in the remote rural areas that form part of my constituency. The outlets that people use are not in remote areas but in the more populated, coastal area, because that is the only place where one can get petrol in Angus. There are difficulties with the amendment, but that does not mean that we will not support it, because we will.
	We have heard a lot about how the situation affects individuals and families, and goods going into the area, and it is true, because the lack of an alternative to road transport means that the price of fuel feeds through to the price of everything. Everything in rural areas costs more because it costs more to transport it there, but, when intervening on the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander), I made the point that it also affects businesses that are based in, and try to transport goods out of, rural areas. Many are food-based, farming or food-processing businesses, and their products have a relatively short shelf life, so they have to move them quickly and pay the costs of doing so. The situation impacts on people's ability to set up, run and maintain rural businesses, which are important in this period of recession, as employment in rural areas is under considerable pressure. We must maintain that employment, so anything that creates greater costs and increased pressure for such businesses is wrong. It is wrong that they face the discriminatory fuel cost before us. For all those reasons, we will support the amendment.
	Things are slightly better, however. My hon. Friend the Member for Na h-Eileanan an Iar (Mr. MacNeil) discussed the Scottish Government's wonderful scheme for road-equivalent transport, which is doing great things for the western isles. The hon. Member for Argyll and Bute (Mr. Reid) was a bit sniffy about it, but I should remind him that while his party and the Labour party were in power for eight years in Scotland, there was no road-equivalent tariff and no attempt to do anything for any island. The SNP Government have made a real start, and we are making progress.
	For all those reasons, we will support the amendment, despite our differences with our Liberal friends.

John Thurso: When I came into the Chamber to support my hon. Friend the Member for Argyll and Bute (Mr. Reid), I did not intend to speak about the amendment, but I am brought to my feet partly by the comments of the hon. Member for South-West Hertfordshire (Mr. Gauke), and also to say what has happened to my paper since last year.
	Let me pick up two points that the hon. Member for Angus (Mr. Weir) made. First, I want to comment on the definition of the area. The map in my paper and the area chosen are used for the Scottish Executive's definition and are available on their website. They are also used for a variety of Government definitions. If the amendment progressed to Committee, it is an accepted convention of the House that Members can work on the assumption that any paper supporting secondary legislation broadly outlines the scheme. That happens when the Government publish notes to secondary legislation that might be introduced. By producing a detailed paper, which can say far more than the limited wording of an amendment, I hoped that there would be sufficient detail to satisfy hon. Members who took an interest in those points.
	The second point was the availability of rural filling stations, about which the hon. Gentleman is right. If one drives along the coast of Caithness, Sutherland and Easter Ross, one sees many abandoned filling stations, which no longer serve fuel for many reasons. However, I deliberately chose a tight area to exclude any accusation that petrol stations that did not charge the premium might be included. I therefore acknowledge that the remedy for the injustice to those who suffer from a premium will apply only to the remoter areas. Other areas on boundaries will not benefit. I make no apology for that because I would rather get something for those most in need than try to satisfy everybody.
	The hon. Member for South-West Hertfordshire and I served together on the Treasury Committee—indeed, I also served with the Exchequer Secretary. Both are reasonable Members and I will therefore try a reasoned approach. The hon. Gentleman said that our amendment was sketchy. Last year, when I wrote the paper before tabling an amendment, which was similar to the one that my hon. Friend the Member for Argyll and Bute has tabled today, I circulated it to Conservative Front Benchers, wrote to the Chancellor and raised the matter in Committee and elsewhere. The paper was deliberately framed to answer questions that had been asked on many previous occasions about lack of detail. The amendment would enable Ministers to take the appropriate action and the paper proposes a reasoned scheme for achieving that. The paper defines the area and the number of people, and touches on cost. Our paper cannot, therefore, be accused of being sketchy. Perhaps the research of the hon. Member for South-West Hertfordshire was a little sketchy.
	I was grateful for the sympathy with which the Exchequer Secretary and her colleagues received my entreaties and for our interchange. Unfortunately, it resulted in the Treasury's saying no—not a wholly unexpected result. Nevertheless, I am grateful for the progress of having a good discussion. The Treasury said no for two reasons: the cross-border issue and the complexity of the administration. I believe that my hon. Friends have already addressed the cross-border issue. We are talking about reducing a premium. However, the premium will always exist; therefore, it will never make sense for anybody to drive into an area where there is a premium and pay more for their petrol. No one will be encouraged to do that. The situation is quite different in Northern Ireland, where there are two wholly separate prices. I would ask the Exchequer Secretary's officials to look into that point.
	The other point is about the administration of the scheme. I believe that, without having written an entire financial accounting system, I have put forward a relatively straightforward scheme, in which the VAT system could be used to operate our proposal to ensure that any rebate given, via the wholesaler to the petrol station, would have to go to the individual motorist. I still believe that to be a sensible and viable way forward and, frankly, no more complex than many schemes run by the Government in other areas.

Angus MacNeil: What the hon. Gentleman is really saying is: "Where there's a will, there's a way." It will be noted in the highlands and islands of Scotland that, when it comes to the difficulties with rural fuel, there seems to be no will from this Labour Government.

John Thurso: I am not sure that the hon. Gentleman expects me to answer that, but let me say that I have always been a far more charitable animal than his colleagues. I am therefore willing to believe in the Government and hope to the last that the natural justice of our cause will, after years of perseverance, be rewarded.

Alistair Carmichael: Thank you for allowing me to take part in this debate again this year, Mrs. Heal.
	We are discussing the one issue that has generated more correspondence and representations to me in the years that I have been in the House than any other. It is an issue that underpins just about everything that happens in island communities such as those that I represent. I make no apology for returning to the issue year after year. The hon. Member for South-West Hertfordshire (Mr. Gauke) said that we had acquired some constitutional status. I just hope that it will help us come to a resolution, because believe me, Mrs. Heal, we will keep coming back to this debate until something is done. If hon. Members cannot be bothered to listen to a bunch of teuchters going on about the cost of fuel every year, there is a perfectly simple remedy: they can do something to solve the problem.
	As others have remarked, the hon. Gentleman made an accusation of sketchiness, which is one that must be addressed. I do not accept that accusation, for reasons that have been outlined eloquently and in detail, most recently by my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso), but let us take it at face value. We hear that accusation year in year out from the Conservatives; and year in year out, that is their only contribution to this debate. The conclusion that I draw, as will many of my constituents and many across the highlands and islands, is that the Conservatives make that contribution because they cannot be bothered to do anything more.
	If, by some electoral freak, the next general election results in the Conservatives on the Opposition Benches replacing the conservatives on the Government Benches, absolutely nothing will change in the highlands and islands. There is no more political will among the Conservatives than there is among the Government to do anything about the problem. If I am wrong about that and if the hon. Member for South-West Hertfordshire has a plan to address the problem, I will cheerfully give way so that he can intervene.  [ Interruption. ] I see no intervention. People will doubtless draw their own conclusions about that.

David Gauke: rose—

Alistair Carmichael: Before I give way to the hon. Gentleman, let me give him a warning: his words will be taken down and may be used against him.

David Gauke: I am grateful to the hon. Gentleman for giving way. As I made clear in my initial remarks, hon. Members have a legitimate cause for concern. I make no criticism of the fact that they regularly—and rightly—raise the matter, but we would assist if they presented an amendment that we thought was more persuasive. We do not object in principle to what they are trying to do, but we remain unconvinced. It is up to him and his hon. Friends to set out a more detailed amendment that we could support.

Alistair Carmichael: I am extremely grateful to the hon. Gentleman for that highly telling intervention. He was asked what the Conservatives would do in government, and he answered by repeating the critique of our proposals that he has already offered tonight. The only conclusion that we can draw from that is that, if the Conservatives were in government, they would do absolutely nothing more. He has been given the chance to tell us what they would do, and he has repeatedly refused to do so.

Angus MacNeil: rose—

The First Deputy Chairman: Order. I have allowed some debate on this point, but perhaps we could now get back to the content of the amendment, rather than discussing some future Government's policy.

Alistair Carmichael: Far be it from me to correct the Chair, Mrs. Heal, but I think that the hon. Member for Na h-Eileanan an Iar (Mr. MacNeil) wanted to intervene on me.

Angus MacNeil: My criticism of the Labour Government also applies to the Conservatives. Where there is a will there is a way, but we are clearly seeing no will from them. The only thing that I would say about the Government is that, when I raised this matter three years ago, their excuses were laughable. Their excuses are getting a little bit better, but they are still hollow.

Alistair Carmichael: Their excuses are laughable, and the joke has worn rather thin for my constituents over the years.
	There was a time when I began to think that we were making a small degree of progress on this issue. On 24 April last year, I raised the matter with the Chancellor in Treasury questions. He accepted my argument, and spoke of his own personal experience. He said:
	"Having filled up my car with diesel in Lewis just a couple of weeks ago, I am acutely aware of how high the petrol prices are."
	He went on:
	"I am struck by the variation in petrol prices across the highlands and islands; they vary substantially...the price of diesel seems to vary quite a bit depending on which side of the Minch one is on."—[ Official Report, 24 April 2008; Vol. 474, c. 1461.]
	I will return later to the point about stretches of water but that was the Chancellor accepting our argument. It does not get much better than that. The Chancellor accepted that he knew about the problem because he had a family connection with the western isles.
	As a result of that exchange, I was offered—and accepted—a meeting, to which I took the hon. Member for Na h-Eileanan an Iar, my hon. Friend the Member for Argyll and Bute (Mr. Reid) and the president of the National Farmers Union of Scotland. I give all credit to the Minister for the conduct of that meeting. It was very open, frank, friendly and constructive. It was held on 4 June, and the conclusion was that Treasury officials would come up with an analysis of the proposal, that proper authoritative work would be done, and that we would then reach some conclusion.
	Summer turned to autumn, and autumn turned to winter. On 24 November, the Minister wrote to me. I thought, "Well, this is great. We have waited five and a half months. There will surely be at least three volumes coming our way." Instead, we got a two-page letter that did absolutely nothing other than restate the rather laughable reasons that had been used in the past to block this eminently sensible measure. I felt a bit like a child waking up on Christmas morning and finding only ashes in my stocking.
	First, the observation was made that the high price of fuel was
	"the result of market conditions, in particular the extra costs involved in transporting fuel to relatively inaccessible locations."
	I appreciate that, when viewed from the Treasury, Orkney and Shetland might seem like an inaccessible location, but is the Minister really telling us that the 15p a litre premium that is paid by my constituents is simply down to transportation? I do not believe that nonsense, and an instance recently brought to my attention refutes it.
	For some time, fuel has been supplied to us in Orkney by a company from Caithness. It is taken from Gill's Bay, on the less fashionable side of the Pentland Firth, to St Margaret's Hope in South Ronaldsay, on an open deck in a road tanker. For some time that option was not available, so the company in Caithness took it in a tanker from Caithness down to Aberdeen, put it on a ferry and took it to Orkney. It was able to do all that at a price lower than that charged by the local supplier. Surely we can all now accept that whatever the reason for the increased price of fuel in my constituency, it is nothing to do with road transport.
	The Minister made two more points in her letter. I hope that she will explain the basis of her thinking, because what we see in these letters is not a reference to the substantial work that we were promised, but merely the politics of assertion. She wrote that a fuel duty rebate was
	"likely to increase the amount of duty lost through fraud"—
	I must say that I am less than impressed with the slight to my constituents—
	"by creating greater opportunities and incentives for false accounting or fuel smuggling."
	The Minister offered no evidence in support of that assertion, although she had five and a half months in which to come up with it. When she responds to the debate, will she undertake to place the evidence that she acquired over those five and a half months in the House of Commons Library? We shall wait to hear what she has to say.
	The second point that the Minister made in her letter was:
	"Having different duty rates in different areas could well create perverse incentives for motorists to drive further in order to fill up on 'low-duty' fuel, both distorting the fuel market and resulting in an increase in CO2 emissions, contrary to the Government's policy of seeking to reduce polluting emissions."
	I consider that to be the most illuminating example of Treasury thinking that we have seen so far. The Minister honestly presents to us, and expects us to take seriously, the proposition that someone will embark on a 12-hour ferry journey from Aberdeen to Shetland in order to buy petrol that will still be about 10p dearer than it would have been in Aberdeen. That is obviously the way the Treasury's mind works, and when we understand that, we understand why the economy is in the mess that it is in today.
	My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander)—who, unfortunately, is no longer in the Chamber—referred to the impact of high fuel costs on prices, which I think is widely accepted. There is, however, an even wider impact. The higher prices paid by people in our communities make living in those communities that much more difficult. As a consequence of the increased costs, we see the continuation of population drift—and if there is a single threat to my communities that is greater and more immediate than the high cost of fuel, it is a declining population.

Angus MacNeil: The hon. Gentleman is making a very good case. People—certainly people in my constituency—recognise that we have had no joy whatever from the Treasury, which fails to realise that tax on a litre of petrol is actually higher. However, my disappointment with the Treasury is matched only by my disappointment with the Office of Fair Trading. I think that, like me, the hon. Gentleman has met representatives of the OFT in the past year. When told of the two types of contract between the island and the mainland, they did not want to investigate at all.

Alistair Carmichael: I have been to the Office of Fair Trading, and its representatives have come to see me. I can tell Members that the only thing one can be sure about is that the Office of Fair Trading is an office. It understands nothing about trading, and it certainly has no concept of fairness. That, however, is a debate for another day, although I could cheerfully hold forth on it for another 20 minutes without drawing breath. I promise that I will not do that, Mrs. Heal.  [Interruption.] If the hon. Member for Stockport (Ann Coffey) wants me to do it, I will cheerfully do it—no, she is more interested in her BlackBerry. Very wise.
	The point about population decline is that, in the present economic circumstances, communities in the highlands and islands, especially the islands, become particularly vulnerable, and the problem becomes particularly acute. As I have indicated already to the hon. Member for South-West Hertfordshire and to others, I am a forgiving man, so I am prepared to offer the Minister one more opportunity tonight—unnecessarily perhaps and perhaps it is unwise to be so generous, but that is the sort of man I am. She can take the proposal seriously. If she has massive problems with defining where to draw lines on maps, let her take the lines that nature has drawn for her. She can start with a scheme that applies to island communities only. Then we will know the truth about the assertions about people driving great distances to get cheap fuel, which costs them more. Then we will know the truth about fraud and duty evasion, and then we will know the truth about the extra costs of transport. Give us a pilot scheme that applies to island communities only. Let us see how that works and do something, instead of just offering the warm words that we have had in the past.

Jeremy Browne: Thank you, Mrs. Heal, for giving me an opportunity briefly to contribute to this debate, which is important. I am delighted to see so many of my colleagues, who are standing up for the rural communities of the UK. It is notable, I am afraid to say, that, with the honourable exception of the hon. Member for Stroud (Mr. Drew), who has been here for part of our deliberations, no Conservative or Labour MPs feel that it is worth their while defending the interests of rural communities. That is a source of some regret.
	I will not rehearse the arguments that have been advanced for amendment 5, because those have been advanced powerfully and passionately by a number of my hon. Friends. I congratulate my hon. Friend the Member for Argyll and Bute (Mr. Reid) on again raising this important subject and my colleagues representing constituencies in Scotland, England and Wales, who have all championed the interests of their constituents so persuasively and made a robust but highly considered case to the Treasury Minister.
	I do not think that anyone is claiming that the amendment has every final detail in it. That is not the intention, but it provides a valuable framework by which the Treasury could progress. The Treasury would have to put its mind to how things would work in practice, but it has been ably assisted in that task by the contributions of my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander), who spoke about how it would work in practice and even put figures on the number of people who would be able to benefit from the proposals.
	My hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) has spoken on the subject many times and even produced a detailed report explaining how the proposal could work in practice. We have also heard from my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael), who put more flesh on the bones, so I do not think it is fair for either Conservative Front Benchers or Treasury Ministers to claim, as they do, I am afraid, that this is an empty amendment. It inevitably provides a framework, because that is the way these proposals are often tabled, but behind it is a large amount of work that we have happily volunteered and are continuing to volunteer to the Treasury. We hope that its finest minds will be put to work to ensure that the scheme can be implemented.
	For all the reasons given by my hon. Friends, this is a point of not only great economic importance but great sensitivity in rural communities throughout the UK. It is essential that all parties try to come up with a workable scheme that satisfies the legitimate requirements that have been persuasively articulated by my hon. Friends throughout the deliberations on the amendment.

Angela Eagle: We have had a passionate debate, and it is right that I should begin by acknowledging the genuine issues surrounding the fact that cars are a necessity in remote rural areas. No one in their right mind could think otherwise. Some rural areas are not served by regular bus routes, so having a vehicle, and having access to petrol with which to run it, can be seen as a necessity. I also acknowledge the worries that have been expressed about higher fuel prices, to which all the Members who have spoken in the debate clearly respond, as it comes up regularly in their contacts with their constituents. I would have expected that to be the case; the fact that I do not represent glens or remote rural areas does not mean that I do not understand that such issues come up in Members' meetings with their constituents. They rightly receive those representations and reflect in this House the frustration and anger, and worry and sense of unfairness felt by their constituents. That is them doing their job, as I would expect.

Alistair Carmichael: The hon. Lady says that we have a legitimate case. Does she not therefore think that our constituents deserve that case to be addressed better than by the rather spurious arguments put in her correspondence of which I have reminded her tonight?

Angela Eagle: I intend to deal with some of those points. By acknowledging certain issues and that the fuel price in one area might be different from the fuel price in another area, and that in some areas, particularly the islands, there are higher fuel prices because of the costs of getting petrol out to them—

Alistair Carmichael: rose—

Angela Eagle: Let me finish my point. I have listened to what has been a long debate, and I would appreciate it if the hon. Gentleman would let me make some preliminary comments so that I can address some of the issues that have been raised. I acknowledge real issues of difficulty, but nobody is saying that fuel prices ought to be directly connected to duty rates, because although those rates have an effect on fuel prices, they are not the whole story.
	It is only right that I acknowledge that fuel prices account for a higher percentage of the cost of living in remote rural areas. The hon. Member for Argyll and Bute (Mr. Reid), who moved the amendment, has proposed a reasonably specific measure, which Members representing rural areas have presented to us before over the years. As the process has gone on, we have had debates about that measure. As well as hearing from Members from Scotland and its remote rural areas or islands, we have heard from Northern Irish Members, and the hon. Member for Somerton and Frome (Mr. Heath), who has his own rural areas to represent. I acknowledge the cost issues for those who live in rural areas, but I think that other Members—particularly opposition Members—ought also to acknowledge that their solution to this is not an easy one and that it is not without its own difficulties. In a grown-up debate on the issue, I would acknowledge the problems related to the higher fuel prices and other Members would acknowledge that the solution that they are pushing is not without its problems. If we were to do that, we might have the chance of a reasonable discussion.

Angus MacNeil: I am grateful to the Minister for giving way. Will she acknowledge that the highest fuel prices mentioned in the debate are up in Stornoway, where petrol costs £1.03 and diesel costs £1.13? Will she therefore acknowledge that people living on the islands of Scotland are paying more tax per litre of fuel in duty and VAT than those living anywhere else in the country? The argument is about tax fairness. The tax the Exchequer gets from a litre of petrol in Stornoway should be the same as it gets from a litre of petrol in London.

Angela Eagle: By definition, that can be the case only if fuel prices are exactly the same everywhere in the country—that is the logical response to the hon. Gentleman's point. Nobody is arguing that there is a direct 100 per cent. connection between the rate of fuel duty and the price. I do not know whether he is suggesting any opposite or different approach, but in the UK we leave petrol producers to decide on the price. The Government levy a duty, but there is not always an easy connection between the level of duty and the price at the pump. When there is more competition the price at the pump can be driven lower than it is when there is no competition, as has been said by several opposition Members. That much is true, but this is about whether they are arguing that we should maintain one set level of petrol price—it is almost like the universal service obligation for the post. Setting a commodity price, albeit an important one, at the UK level represents a very different approach from the one to which we have become used over the years.

David Heath: The fact is that the people who need petrol the most pay the most and can afford it least, whereas those who need it the least pay the least and can afford it most—that is the basic equation. If the Exchequer Secretary does not accept the proposal that my hon. Friend the Member for Argyll and Bute (Mr. Reid) is making, surely it is incumbent on a Government who believe in social justice and good economy to find an alternative way of dealing with that basic problem.

Angela Eagle: I was going to discuss the issue that the hon. Gentleman raises. I just wanted to make the point that it is not obvious that trying to manipulate the duty in different ways would have a predictable read-through to the price at the pump. There is no guarantee that it would, without our setting an actual price for petrol. We have never done that in the UK and it may well not be legal. The amendment assumes that predictability. Nobody on the opposition Benches has questioned that, but there are big question marks around it.
	It is also not necessarily the case that those who are least able to afford it pay the highest prices in all cases, because great variation in price exists across the country and sometimes from one petrol station to another. The difference in prices on the various websites demonstrates that variation. It is greater in the highlands and islands than anywhere else, but there is a lot of variation and there is no obvious logic to the prices that one pays at the pump, despite the fact that fuel duty is the same across the country. That needs to be acknowledged and it might point to the fact that trying to manipulate the fuel duty is not the answer.

John Thurso: I accept the point that the Exchequer Secretary made—solving this problem is not without its difficulties—and I, for one, am entirely ready to engage in a process with her. If her officials have read the paper that I sent them last year, they will know that every one of the points that she just made is answered. The premium is pretty constant in the north and the price varies. This proposal deals with a reduction in the premium, but the price continues to vary. The mechanism that I set out, through the supply chain, means that the money is guaranteed to go to the motorist—it cannot do anything but. May I suggest to the officials who briefed her, perhaps this evening, that they need to liaise with the officials who read the notes I submitted?

Angela Eagle: The hon. Gentleman's paper has been much prayed in aid and I pay tribute to the work that he has done to try to solve some of the practical problems. His eightfold classification would produce many tiny little pockets scattered all over Scotland, especially south Scotland, where the duty differential would apply. Not all of those areas experience higher fuel prices than the norm, within a reasonable fluctuation. Not all of them have similar prices either, as there is a wide variation. Some of that variation has to do with the normal workings of the petrol market and the fact that we do not mandate a single price for petrol across the country. Some of it may well have to do with rurality, but that is difficult to distinguish. Drawing boundaries on that basis would create many tiny little areas where fuel duty was lower than in other areas.
	Another aspect of the plan produced by Opposition Members is to move the duty point from petrol distribution networks and oil companies to individual petrol stations, but that would be very difficult to achieve administratively and is not something that I would wish to do unless I could see major benefits accruing from the change. I do not believe that major benefits would accrue from that change, and that is another practical and administrative difficulty with the solution that hon. Members have produced.
	I recognise the difficulties, but I remain unconvinced that these proposals are the right way to tackle them. Therefore I ask the Committee to vote against amendment 5.

Alan Reid: We have had an interesting debate—

Hywel Williams: On this side of the Chamber.

Alan Reid: The hon. Gentleman is right to point out that the debate has been concentrated in one particular corner of the Chamber—

Alistair Carmichael: Was my hon. Friend as struck as I was by the fact that the Exchequer Secretary accepted that there was a problem, but her only contribution to the debate was to highlight problems with the solution that we have suggested? She offered absolutely no solution of her own. What consequences await a party that identifies problems, but lacks the will or the guts to do anything about them?

Alan Reid: I perhaps have a less combative style than my hon. Friend, but I share his sentiments. The Labour and Conservative parties have not come out of the debate well. My constituents and those of other hon. Members who represent the highlands and islands may be punished at the pumps, but come 4 June the Labour and Conservative candidates may well be punished at the ballot box for the approach that their parties have taken tonight.

Danny Alexander: My hon. Friend may be less combative than my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael), but does he agree that it is a strange approach for Ministers to take to say that they have identified a problem, but that they refuse to lift a finger to try to solve it? That may have been the approach that they have taken to most of the economic problems facing the country, but on this occasion the Exchequer Secretary admitted that there is a problem. I suggest that pressure is applied to the Government so that they come forward with their own solution.

Alan Reid: My hon. Friend makes an important point. The only good thing to come out of the debate was the acknowledgement from the Government that a problem exists. However, as my hon. Friend the Member for Orkney and Shetland pointed out earlier, that acknowledgement was made more than a year ago in Treasury questions. I will at least acknowledge that the Government are sympathetic and that they realise that there is a problem. However, as my hon. Friend said, it is incumbent on the Government to come forward with a solution if they do not like the solution that we have proposed.

Angus MacNeil: The Minister and the team at the Exchequer are clever—we know that—but the wilful misunderstanding that we saw tonight would never have happened if this matter were decided in Edinburgh. My constituents will be looking on and thinking that this underlines the reasons for Scottish independence. A wilful lack of understanding such as that which is being shown tonight could not and would not happen in an independent Scotland.

Alan Reid: I do not want to stray too far from the debate, but a brief response to that intervention is that my island constituents do not like the policies of the hon. Gentleman's Government in Edinburgh. They only benefit his constituency—

Angus MacNeil: What about Coll and Tiree?

Alan Reid: Other than Coll and Tiree, islanders are paying extortionately. We take no lessons from his party.

David Heath: May I intervene before this becomes an entirely Scottish affair again? I must say that my constituents would not be reassured if it were left to the Government in Edinburgh to determine such matters. The complete absence of focus and ideas from those on the Treasury Bench or on the Conservative Front Bench on this issue, which affects many rural areas across the UK, underlines the fact that neither party has a clue what happens in rural Britain.

Alan Reid: My hon. Friend is quite right. The Conservative party certainly does not have much of a clue. I want to respond to the speech made by the hon. Member for South-West Hertfordshire (Mr. Gauke). I can assure him that by breakfast tomorrow he will be a household name in the highlands and islands. I certainly worry that one or two of my constituents might have a seizure when they read the local paper tomorrow over their porridge or their cornflakes. When they read his comments about the price of beer in London, they will be absolutely outraged, and rightly so. A former Economic Secretary to the Treasury—I cannot remember his constituency, but we all know who he is—made exactly the same comment when he replied to a similar debate three or four years ago. He quickly became a household name throughout the highlands and islands and his name is still greeted with outrage. I always encourage people to visit the highlands and islands on holiday, but perhaps the hon. Member for South-West Hertfordshire would be well advised to stay away. He might well get an abusive phone call tomorrow from his fellow party members on his party's European list in Scotland.
	The Conservatives offered us nothing and, despite their sympathy, the Government have offered us nothing.

John Thurso: Will my hon. Friend take this opportunity briefly to rebut the Minister's assertion that the designations on the map will lead to many pockets? If she had been able to see the research that I had undertaken, she would know that the small pockets of land have no petrol stations in them, and that it therefore does not apply to them. The big areas do have the petrol stations. If she had done what I have done, and tracked those prices, she would know that there is always a premium in all of them.

Alan Reid: My hon. Friend is quite correct. I have the map that he produced in front of me and there are one or two pockets where, as he says, there are no petrol stations. Most of the area in the mainland that would be involved in the scheme is contiguous.
	The hon. Member for South-West Hertfordshire said that our scheme was rather sketchy, but my hon. Friend the Member for Caithness, Sutherland and Easter Ross put forward a very detailed scheme in his paper. I shall not read out the whole paper—[Hon. Members: "Oh, go on!"] Despite that request, I shall concentrate on the part of the scheme mentioned in paragraph 3.2 of his paper, where he gave a summary of how the scheme would be implemented.
	First of all, filling stations in rural areas designated by the amendment will have to apply to be designated filling stations under subsection (3). When they do so, there will be a discussion with HMRC to establish an agreed trading margin based on VAT returns from previous years. The returns will contain both input and output tax, and so are a record of sales and costs.
	Designated filling stations would then contract to use the agreed margin on all fuel sales. They would be required to keep evidence to prove conformity, which could be audited easily as part of the normal VAT checks procedure. There is plenty of detail, and the scheme is not sketchy in the way that the hon. Member for South-West Hertfordshire suggested.

Alistair Carmichael: I thank my hon. Friend for making that point. Does he agree that any sketchiness in the debate came from the Minister? Her speech lacked detail, and she had no case to make to the people of the highlands and islands.

Alan Reid: I agree with my hon. Friend that there was no proposal from the Minister.
	The hon. Member for South-West Hertfordshire said that the scheme was sketchy and would be difficult to operate, but my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) pointed out that several European countries successfully operate similar schemes. If they can do it, the UK Treasury is capable of drawing one up.
	My hon. Friend the Member for Caithness, Sutherland and Easter Ross said that the environmental argument for high fuel taxes works only in places where there is a public transport alternative. Where there is no such alternative, he said, the scheme simply punishes people.
	I want to conclude by putting forward a proposal for a pilot scheme, and it is similar to the proposal made by my hon. Friend the Member for Orkney and Shetland. I suggest that the scheme apply initially to only one island, as that would allow us to identify problems and prove that it was viable. Scotland's SNP Government have already introduced a pilot scheme for certain islands, but it misses out nearly all the ones in my constituency.
	That is extremely unfair, so I suggest that the Minister choose one of the Atlantic islands in my constituency, such as Mull or Islay, as a place for a pilot of the scheme that we are proposing so that we can establish whether it is feasible. I hope that she will take that suggestion forward.

Question put, That the amendment be made.
	 The Committee divided: Ayes 59, Noes 301.

Question accordingly negatived.
	 Amendment proposed: 11, page 10, line 40, at end add
	', provided that before this date, the Chancellor has published a report examining the costs and benefits of the introduction of an automatic fuel duty stabiliser whereby the rates set out in HODA 1979 vary inversely in comparison to oil prices.'.— (Mr. Gauke.)
	 Question put, That the amendment be made.
	 The Committee divided: Ayes 134, Noes 346.

Question accordingly negatived.
	 Question put, That the clause stand part of the Bill.
	 The Committee divided: Ayes 299, Noes 48.

Question accordingly agreed to.
	 Clause 16 ordered to stand part of the Bill.

Clause 20
	 — 
	Bingo duty

Stewart Hosie: I beg to move amendment 14, page 12, line 15, leave out subsection (2).

Michael Lord: With this it will be convenient to discuss the following: amendment 9, page 12, line 18, at end insert—
	'(3A) The Treasury must, before the publication of the 2009 Pre-Budget Report, prepare and lay before the House of Commons a report on the impact of the increase in bingo duty under subsection (2) on the competitiveness of licensed bingo clubs.
	(3B) A Minister of the Crown must, not later than one month after the report has been laid before the House of Commons, make a motion in that House in relation to the report.'.
	Amendment 15, page 12, line 19, leave out from 'effect' to end of line 20 and insert
	'as the Treasury may by order provide.
	(4A) An order under subsection (4)—
	(a) shall be made by statutory instrument,
	(b) may not be made unless a draft has been laid before and approved by resolution of the House of Commons, and
	(c) may not be made until proceedings in the High Court in relation to The Commissioners for Her Majesty's Revenue and Customs vs The Rank Group plc (CH 2008/APP/0448) have concluded.'.

Stewart Hosie: The amendment seeks to introduce fair taxation for bingo, in the light of the increase in bingo duty from 15 to 22 per cent. For the gaming or gambling industry, that means that whereas online bingo, casino and poker, online sports betting, sports betting in a betting shop, football pools and betting exchanges are all taxed at 15 per cent., licensed bingo clubs, almost uniquely, are taxed at 22 per cent. I say "almost uniquely" because casino gaming duty is levied on a sliding scale between 15 and 50 per cent., but I will return to that subject later.
	As many hon. Members will know—although there are almost no Members here on the Labour Benches, apart from the long-suffering Minister and a Whip—there has been an ongoing campaign for fair taxation on bingo, in order to remove the double taxation of VAT and bingo duty. What at first glance appeared to be a success, with the removal of VAT, now seems to have been merely a sleight of hand by the Government. With one hand they have given, by removing VAT, but as the industry claims—and I believe that the numbers stand up—they have taken away a great deal more by raising bingo duty to 22 per cent.
	As I understand it, the Government claim that the changes will benefit the industry to the tune of some £15 million a year. My argument is that that calculation is rather flawed. That flaw is rooted in the Treasury's shortcoming in being unable to identify the VAT charged on games of bingo. As I understand it, the net effect of the changes is that Mecca Bingo alone, which represents about one third of the sector by value, will pay an extra £6 million a year to the Exchequer, with about £18 million paid across the whole industry. That is in the context of a sector that last year made an operating profit of £41.8 million.
	It would be instructive to take a look at the background to the changes proposed in the Budget and the Finance Bill. In May 2008 the VAT and duties tribunal ruled that the application of VAT to interval bingo in Mecca bingo clubs was in breach of the EU principle of fiscal neutrality, which states that similar services should be taxed equally. As a consequence, Mecca Bingo and other bingo operators ceased to pay VAT on interval bingo. The benefit of the VAT abolition therefore applies only to main-stage bingo, which represents only about one third of all bingo by value. The increase in bingo duty affects all bingo, whereas the reduction in VAT benefited only one third of the revenue.

Brian Binley: Does the hon. Gentleman agree that this is an iniquitous tax, being paid mostly by the elderly grandmothers and people of that sort who frequent our bingo halls? Are the Government not being unkind to that group of people?

Stewart Hosie: I shall talk about the social costs and benefits of what was the iniquity of double taxation, and what remains the unfairness of this particular tax. I am sure that the hon. Gentleman will be able to speak to his constituents in his own way to describe how unfair these proposals are.

Don Foster: The hon. Gentleman referred earlier to the Government's claim that there would be a £15 million benefit to the industry. Anyone who has studied page 153 of the Red Book will see that the abolition of VAT on participation fees would save the industry £50 million. He has rightly pointed out that VAT is no longer charged on interval bingo. Will he ask the Minister to intervene to tell us whether the £50 million included that change in respect of interval bingo? That is the key issue.

Stewart Hosie: That is a very important question. The fundamental point is that there has been an inability to count the VAT; it has been assessed, or calculated. The industry advises us that the Treasury has overestimated the historic levels of VAT, but if the Minister would like to clarify that point, I would be delighted to give way to her.

Angela Eagle: I can clarify the costings in the Red Book: they work from the law as it stands prior to the changes in the Budget. The law refers to the status quo of having VAT on participation fees, notwithstanding the results of the tribunal, which are still due as the considerations are ongoing. I hope that that makes it clear that the costings relate to the status quo prior to the Budget.

Stewart Hosie: I thank the Minister for that clarification; she has made the point perfectly.
	In the absence of what many would consider to be accurate information—whether or not interval bingo was included—or a correct calculation of the VAT to justify the increase, my judgment would be that the principle of fairness should apply. Licensed bingo clubs should therefore be taxed at 15 per cent., which is comparable to the rate applied to the other forms of gaming that I described earlier. That is what my amendment seeks to achieve.
	I seek to achieve that also for the reason that the hon. Member for Northampton, South (Mr. Binley) mentioned earlier. The importance of bingo in our communities cannot be overstated. I can think of many instances—including one in my own constituency—of licensed bingo clubs that are secure, and in which proper investment has been made providing good-quality entertainment, particularly for women and particularly in the middle of working class communities. To lose those facilities and that capacity would be devastating for social cohesion in certain communities.

Brian Binley: In my constituency, a well-managed and organised bingo hall provides highly subsidised food for people. Many of my elderly residents go along there at 12 o'clock, have a well-prepared lunch, then stay on for the entertainment at a relatively cheap rate until 4 o'clock. That is almost a social benefit, and that should be taken into account by the Government.

Stewart Hosie: That is absolutely right. We cannot overstate the social importance to certain communities of well-run licensed bingo clubs. There is no question about that. The loss of such clubs would be devastating.
	In many of these communities, the clubs provide not only entertainment and community cohesion but valuable jobs. I am sure the Minister will correct me if I am wrong, but the previous argument was that if someone who worked in a bingo club lost their job, they were likely to be absorbed into the work force elsewhere. However, at that time there were perhaps 600,000 or 700,000 vacancies on the books. Now that unemployment stands at more than 2 million and the number of vacancies on the books is shrinking, I am not convinced that that argument still holds water.

Bob Spink: Timing is not the only issue. The tax is pernicious because it is a tax on elderly and frail people. The only time that my elderly mother got out of her house to meet other people during the week was when she went down to the bingo hall in Halifax, where she enjoyed a social life. That kept her in her own community, safe, off social service benefits and out of the NHS. The tax will cost the Government money in the round; it will not save them any money.

Stewart Hosie: I hear what the hon. Gentleman says. I am trying to make the fiscal case, and I hope he has not overstated his position, but I have made the point that bingo clubs are vital in many communities, particularly to women. In certain communities they provide an afternoon as well as a night-time economy. They are extraordinarily important.
	I was talking about employment levels and the importance of jobs in the communities concerned. We have seen 31 bingo halls close recently. I think that one closed very recently in Montrose, in the constituency of my hon. Friend the Member for Angus (Mr. Weir). That was a loss, and it involved a loss of jobs. We have seen 4,000 jobs go from the sector in the last six years, and in many cases it was argued that that was a result of the double taxation. Goodness knows what would happen now, with this unfair taxation. We do not want any more jobs to go—certainly on that scale—in the middle of a recession. There are many, many arguments for ensuring that the tax regime is fair, and that bingo clubs stay open to provide social life, community cohesion and employment.
	I said at the outset that bingo was taxed unfairly in comparison with many forms of gaming, and that casino duty was applied on a sliding scale, rather like income tax. The first £1.9 million of revenue in a six-month period is taxed at 15 per cent., the next £1.2 million is taxed at 20 per cent., and so on through the bands—30, 40 and 50 per cent. I understand that even if bingo were taxed on that basis, all clubs would pay tax at 15 per cent. I am sure that if there were a super-club making huge amounts of money the levies would be high, but it strikes me that, given that all online betting and betting shop gaming is taxed at 15 per cent., given that even if bingo were taxed on the same basis as casino duty it would be taxed at 15 per cent., and given the social importance and importance to community cohesion and jobs of bingo halls in many of our constituencies, fairness alone should dictate that the duty should not be raised to 22 per cent. I hope that the Government will view that suggestion sympathetically, not least given the difficulties over what is happening to VAT, on which they seem to be basing their calculation of any benefit conferred on the industry by the tax increase.
	I am pleased that we have done away with the iniquity of double taxation. I hope that the Minister will now go a step further and, with the single tax, ensure fair taxation and fair play for bingo.

Eric Illsley: It is a pleasure to follow the hon. Member for Dundee, East (Stewart Hosie), who gave a very good account of the present state of bingo taxation. As he said, over the last few years attempts have been made to remove the iniquity of the double tax. He will probably recall that last year there were meetings between Members and the Prime Minister, the Chancellor and my hon. Friend the Exchequer Secretary with the aim of removing VAT on participation fees, which is where the double taxation occurred: bingo clubs were paying VAT on participation fees while also paying gross profits tax.
	Last year's campaign to reduce the burden on bingo clubs was unsuccessful, although, as the hon. Member for Dundee, East pointed out, a number of clubs were closing. In my constituency, one of the Gala bingo clubs closed towards the end of last year. We lost a valuable facility, which I will come on to in a moment.
	The campaign to change the double taxation started in 2003 with amendments to the Finance Bill of that year.

Greg Hands: I think that the hon. Gentleman mentioned meetings with the Prime Minister. May I take him back? If I am not mistaken, the hon. Gentleman asked about the matter at Prime Minister's questions on 25 July 2007. The question was about the taxation of bingo. The Prime Minister agreed to meet with him and a delegation, but my understanding is that when the meeting happened no Treasury officials were there, even though there was a clear undertaking that it was about the taxation of bingo.

Eric Illsley: We did have a meeting with the Prime Minister, but at the same time we had a meeting with the Chancellor of the Exchequer and with the Exchequer Secretary to the Treasury. We also met with the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Bradford, South (Mr. Sutcliffe), because of his departmental involvement in the matter. Therefore, it is not fair to criticise the Government on the grounds that there was no Treasury involvement; there were detailed meetings with Treasury Ministers at the time of that delegation. However, the hon. Gentleman is right that the Prime Minister agreed to that meeting.
	As I mentioned, this matter goes back to the Finance Bill 2003, when the Bingo Association tried to reduce the double taxation burden on the bingo industry. A combination of factors led to further problems perhaps two years ago, as we pointed out last year: the ban on smoking, the downturn in the leisure economy and people drinking at home. Beer prices, alcohol duties and supermarkets all played a part in the argument. A combination of factors led to problems experienced by bingo clubs. The largest number of closures occurred in Scotland, which suffered the greatest loss of bingo clubs as a consequence of the policy of double taxation.
	I mentioned that there was a closure in my constituency last year. I recall a few years ago opening a refurbished Gala bingo club in my constituency. I was invited there. It had been redecorated; the clubs are very good in that regard. They provide a welcoming environment. They are brightly lit; they are not dingy places. They are welcoming. They provide food and entertainment. When I opened that refurbished club, I was astounded to be told that the club had 26,000 members in Barnsley—an incredible number.
	It is well worth the Government thinking how many people are affected throughout the country by closures of bingo clubs. Many people use those clubs. Many people like to take part in a soft form of gambling. Many of the people who use bingo clubs are women; they are often younger women who want to go into a safe place where they can gamble a bit and have a drink in a protected environment. Not that many men frequent bingo clubs; it is mainly a female entertainment. It is sad that we seem to be putting pressure on that type of club, yet we allow other harder forms of gambling a free rein.

David Drew: I agree entirely. Does my hon. Friend agree that one of the problems is that the perception is that the Government are making it hard for these clubs and their customers to continue and that that is having a knock-on effect on the voluntary sector in terms of bingo? There are all sorts of rumours at the moment about what people are going to be charged for a game of bingo and what tax will be levied. That is not a good thing. This is a good form of local entertainment, yet we are almost taking it away.

Eric Illsley: My hon. Friend makes a valid point. Bingo is played not only in licensed bingo clubs but in places used by charities, during get-togethers and, dare I say it, in political clubs where we try to fundraise.
	After a lot of hard campaigning, a lot of people thought that in this year's Budget the Government had answered the problems of the bingo operators by removing VAT on participation fees and ending the policy of double taxation. Only then did they realise that the gross profits tax had been increased from 15 to 22 per cent.—an incredible 50 per cent. increase in that rate of tax, as applied to the bingo clubs.

Brian Binley: The hon. Gentleman is very knowledgeable about these matters and is a great supporter of bingo clubs, as he is of his community generally. Does he think that that tax increase was about clawing back some of the money the Government thought they gave away by doing away with double taxation, or was there another reason?

Eric Illsley: I am grateful to the hon. Gentleman for his kind words. I cannot answer his question; perhaps when the Minister responds, she will explain why there has been such a big increase in gross profits tax when everybody thought that the Government were going to give a helping hand to bingo clubs at this time. The impression is that what the Government have given away with one hand they have recovered with the other, because the bingo clubs say categorically that they are paying more tax now than before the Budget and that they are going to pay much more tax; I have a brief to hand from the Gala Coral Group.
	We could say, "Well, the Government have a big public sector borrowing deficit, and we must find the money to reduce our public borrowing from somewhere," but it seems to me that we are not going to make a big dent in that just by taxing the old ladies down at the bingo club; that is not going to bring in £175 billion. It seems strange that after all the pressure applied in campaigning against double taxation, we have been hit with this increase in the gross profits tax, and the bingo clubs are worse off. The only argument the Government have got is, "Everybody is worse off. We are paying more for alcohol and tobacco and so forth, as duties on them have gone up, so why not bingo?"
	The important comparison, however, comes in what the hon. Member for Dundee, East said about the rates of gaming duty in clause 19. He said that the first £1.9 million is at 15 per cent. and the next £1.3 million is at 20 per cent. The bingo clubs will get nowhere near that. The online gaming and gambling companies will do so, however. I was told a few weeks ago—I will not mention any names—that the daily turnover of one of these online gaming organisations is £50 million. That is the turnover from internet betting in one day, yet we are absolutely nailing down bingo clubs with their soft form of gambling.

Kelvin Hopkins: I agree very much with what my hon. Friend is saying. I have visited my local bingo club and listened to its case. This is portrayed as a tax on companies, but in fact is it not, effectively, a regressive form of taxation on people on moderate and low incomes? The Government rightly want to raise more tax to cover their current problems, but that should be done in a progressive manner, by taxing the better off rather than the poor.

Eric Illsley: My hon. Friend is absolutely right; it is a regressive form of taxation. When I was taught economics, I was always told that one of the five or six rules of taxation is that it must be progressive. He is right that we have moved too far away from that. We could tax other areas or industries; we could find other ways of raising this amount of money than taking it from bingo clubs, where a lot of our constituents enjoy simple entertainment.

Don Foster: Does the hon. Gentleman not agree that even if we were to try to raise more money to make up for the cut in the tax on bingo, as many of us would like, we could remain within the field of gambling, because at present soft forms of gambling appear to be being taxed more heavily than harder forms? Surely we could look at a way of switching this, not least in respect of online gaming?

Eric Illsley: I entirely agree. There are other, harder, forms of gambling. There are no VAT payments on betting shops. People simply walk into the betting shop and place their bet; there is no VAT payment, and nor is there any other taxation payment in relation to that bet. As the hon. Gentleman says, we could find other ways of getting hold of this balancing increase by turning to other, harder forms of gambling, and taking a more lenient attitude towards bingo, which is one of the softest and least damaging forms of gambling. It appeals to hundreds of thousands of our constituents—mainly females, as it is a protected environment providing soft entertainment. Why do we seem to be punishing it so hard year after year?

Greg Hands: First, may I serve notice that we hope to have the opportunity to put our amendment 15 to the vote? We will also vote for the Scottish National party's amendment, although our reasoning is different; we seek a postponement of any changes to the duty regimes, as I shall outline.
	As the Committee is aware, the Government are seeking, through this and related clauses, to remove VAT from bingo while increasing bingo duty from 15 to 22 per cent. The purpose of our amendment is to delay the implementation of the rise in duty until the High Court resolves the legal position of VAT on bingo. I ought to make it clear at the outset that if our amendment is carried, we will also seek to delay the removal of VAT. We have no wish to widen the gaping hole in the public finances. Instead, we wish to prevent the Government from pre-empting the legal process through this sudden change to the system—after all, it was the Government themselves who launched the appeal to the High Court.
	The background to this change is a VAT tribunal last year, as has been mentioned, at which one of the major bingo groups, Rank, which operates the Mecca chain of clubs, successfully challenged the applicability of VAT to new, faster versions of bingo played during intervals in the traditional game. As we know, the industry as a whole has long argued that the so-called "double taxation" of duty and VAT was unfair. The tribunal found that it was also, at least in part, unlawful. As we know, Rank has not paid a penny in VAT on these games since, and Her Majesty's Revenue and Customs had to return more than £59 million in previous payments last November. As I said, it was the Government who appealed the tribunal's decision.
	I wish to stress that the Opposition are not expressing a view, one way or the other, on the legal merits of Rank's case, but we think that when the High Court has already heard the evidence and is expected to make a decision within weeks it is quite wrong of the Government to rush through changes to the system. It was only in February that the Exchequer Secretary claimed
	"that altering the tax regime would not be appropriate."—[ Official Report, 25 February 2009; Vol. 488, c. 130WH.]
	We are asking what the reason is for her volte-face.
	Ministers have even had the cheek to suggest that bingo operators are standing behind them on this. Speaking in the Budget debate, the Financial Secretary said that
	"overall, the announcements in the Budget on the taxation of bingo are welcome to the industry."—[  Official Report, 23 April 2009; Vol. 491, c. 434.]
	I have to break it to them that they could not be further from the truth. The test case in the High Court has the potential to affect every operator and every form of the game. This is not some arcane spat between Rank and HMRC; other operators confirm that they have been watching the case closely as well, and that it has already altered their payment of VAT. As a result—this has been mentioned—nobody believes the estimates of VAT receipts from bingo that appear in the Red Book. Because operators have not been paying VAT on substantial parts of their business, they each believe that they will pay more if bingo duty increases. One operator, Top Ten, is not paying any VAT at all at the moment, Gala says that it will pay more tax as a result of the changes, and Rank had to issue a profits warning the day after the Budget as a direct result of the changes.
	The basis for the Government's figures appears even more curious when one examines recent parliamentary answers. Perhaps there is some credible explanation for why the Exchequer Secretary estimates that £65 million was raised from VAT on bingo participation fees in 2008-09 but only £50 million would be lost by its removal in 2009-10. When VAT receipts are projected for 2010-11, with VAT back at 17.5 per cent. throughout, they are estimated at only £55 million. These estimates are all over the place; they have gone from £65 million down to £50 million and back up to £55 million. Bingo clubs have been closing, so unless the Exchequer Secretary anticipates a new wave of bingo clubs opening, how does she explain the fact that the 2011-12 figure goes up to £60 million? To make one's puzzlement complete, the estimated boost to revenue from raising duty is given as a static £35 million in each of those years, so we have severe doubts about the figures being used by the Government.
	While I hope for answers on those points, the Government should at least say whether those are estimates of what the industry is actually paying or what the Government think it should pay. Those are two very different things, but the Exchequer Secretary appears to have said the latter.
	The Government's measures could take on a very different complexion, depending on the outcome of the High Court appeal. As I have said, we want the court to determine the merits of the case that it has only just heard. Surely the Government can see that their proposals can be properly evaluated only after the Court's decision? I fear that the Government know that all too well. The changes in the Bill have all the hallmarks of a pre-emptive strike by the Treasury. If the Government were in any doubt about the outcome of the appeal, in revenue terms it is now heads the Government win, tails bingo loses. Given our overall position of awaiting the ruling of the High Court, we will support both amendments 14 and 9 if they are pressed.
	The effect of amendment 15 would be to allow Ministers the opportunity to think again in the light of the High Court's verdict and take whatever action seems reasonable in that context at the time. Ironically, the Red Book figures suggest that the Exchequer would be better off while it waited. The industry wants to wait and, until we have the Court's ruling, the fairness of the Government's proposals must stand in question.

Jeremy Browne: Amendment 9 is in my name and that of my colleagues. The case for amendment 14 has been put very effectively, and it gets to the real nub of the issue. If it is pressed to a Division, my party will support it. Amendment 15, tabled by the Conservatives, has also been explained concisely but effectively by the hon. Member for Hammersmith and Fulham (Mr. Hands), and we would support it too. Amendment 9 is much broader and it may not be necessary to press it, but it is helpful to have the opportunity to contribute to a debate that justifiably arouses strong feelings in my constituents and those of every other right hon. and hon. Member.
	It is worth briefly touching on the history of our deliberations. Bingo used to be subject to double taxation, which cost the industry some £85 million a year, because VAT was payable at 17.5 per cent. and gross profits tax at 15 per cent. Last year, I tabled a new clause to the Finance Bill to remove that double taxation and another to require the Government to report on the negative impact that double taxation was having on bingo. I am pleased that that point has been taken to heart by the Government and that the anomaly of bingo being subject to double taxation when other forms of gambling were not has been resolved. However, as the hon. Member for Barnsley, Central (Mr. Illsley) said, the problem is that while the Government have made a concession to the bingo industry with one hand, they have taken it back with the other.
	The Treasury estimates that the cost will be £50 million in 2009-10 and £55 million in 2011-12, but we know that those figures are heavily disputed. Clause 20 would increase the rate of bingo duty from 15 per cent. to 22 per cent. and the hon. Member for Dundee, East (Stewart Hosie) drew effective comparisons between bingo in a club being taxed at 22 per cent. and bingo online or in a casino being taxed at 15 per cent. Sports betting online and in a betting shop is taxed at 15 per cent., as are the football pools. There is a clear anomaly. When the bingo companies won their campaign and double taxation ended, they thought that they would be treated on the same footing as other forms of betting and did not expect that concession to be offset with an increase in the gambling tax that they were required to pay.
	Mecca, which is the organisation that I suspect most people will be familiar with, generates about £150 million of profit a year. It will pay £10 million more because of this increase than would have been the case. Let me briefly explain the impact that that will have on individual communities. I am told that each Mecca club pays an average of £900,000 a year in taxes, national insurance contributions and local rates and that 70 per cent. of Mecca revenues come from interval bingo, which was never subject to VAT in the first place. The punishment, in effect, is all the more profound in those circumstances.
	I am also told that 31 bingo clubs closed last year—I think that that number was mentioned by the hon. Member for Dundee, East—so the effect is real, with an impact on the type of people who particularly enjoy bingo. People of all backgrounds enjoy bingo, but that enjoyment is particularly concentrated among some groups of people. For example, the point was made that women in particular participate in bingo much more than they participate in other forms of gambling. There are people within the communities that we represent in the House who are particularly adversely affected by the treatment of bingo.
	Let me conclude by bringing this closer to home. In the two days since Monday—it is only Wednesday, although it feels like it might be later because of the amount of time we have spent on this Bill—I have received 109 letters from constituents who enjoy visiting Mecca bingo in Taunton up to three times a week and want to know why the Government are penalising club bingo. As the hon. Member for Northampton, South (Mr. Binley) pointed out, there are many social aspects that go with bingo. It is not just about the gambling itself, which takes a fairly modest and harmless form, but it is about the food and the social interaction, too.
	Constituents who have written to me on this subject include Edith Garland, Philip Horton, Kim Lee, Mike Hill, Margaret Grundy, Clare Povey, Sandra Loveridge and others. It is also notable how many married couples and families attend bingo together. That has been my experience when I have had the good fortune to visit Mecca bingo in Taunton. I have noticed how many people enjoy going with family members or with their spouses or friends. It is a regular social activity and one that they would be very upset to lose. Of course, bingo is also played in more informal settings across my constituency and across the country.
	I am pleased that the double taxation anomaly has been resolved, but I am upset on behalf of my constituents and the hundreds and thousands, if not millions, of people who enjoy bingo across the country that that has been offset by the increase in taxation that means that bingo is still penalised compared with other forms of gambling. My colleagues and I will support all three of the amendments if and when they are pressed to a Division to try to get the Government to think again on this very important matter.

Edward Timpson: May I endorse the clear and strong arguments that have been articulated by Members from all parties on this issue? It is clear that the issue touches the many communities that we represent, and that is reflected in the fact that every party represented in the Chamber this evening has had a representative who has clearly articulated the view that the Government's current position is untenable and unfair and needs to be reconsidered.
	I should like to declare an interest of sorts, Mrs. Heal, in that I am a member of my local Mecca bingo club in Crewe. I confess that I am a fairly new convert to the game, but my wife and I have had an exceptionally enjoyable evening there, along with many others on that occasion. The hon. Member for Barnsley, Central (Mr. Illsley) said that his local bingo club had 26,000 members. I can tell the Committee that the one in Crewe has 20,000—which amounts to almost one in four of the local residents—and that it contributes hugely to the social life of a great many people.
	Before I deal with the social impact of the Government's proposals in a little more detail, I want to say something about their economic impact. We have heard that the proposals in the Red Book will lead to the Rank and Mecca organisations paying an extra £9 million in tax per year. My hon. Friend the Member for Hammersmith and Fulham (Mr. Hands) said that the Red Book makes it clear that the Treasury's estimate of the effects of the change will depend on the outcome of the High Court appeal. I therefore believe that the Government should let the legal process take its course before they consider its effect on their proposal. Only when they can see the full facts in the cold light of day will they be able to see what the industry's future is likely to be.
	Although the loss of VAT on interval games has been of some benefit to bingo halls, one industry representative said that the fact that they have had to deal almost at the same time with the rise of almost 50 per cent. in bingo duty has meant that it has been something of a pyrrhic victory. Bingo halls have had a very short stay of execution in their attempt to sort out their finances and ensure a long-term future.
	As we have heard, the rise in duty affects all bingo, whether it takes place in the interval or on the main stage. Both forms of the game, and especially interval bingo, will play a pivotal part in the bingo industry's future. Very many of our constituents enjoy bingo on an extremely regular basis, and for them it is often their primary leisure activity. It satisfies their need for social interaction and belonging, as one can clearly see when one goes to a bingo hall to enjoy a game.
	Bingo crosses all sorts of boundaries, and it is played by young and old alike. I think that I am right in saying that an increasing number of younger people enjoy bingo on a regular basis. We need to ensure that they, and those members of the older generation with a long history of enjoying bingo, are able to enjoy the game for many years to come. The Henley Centre published a research paper entitled "Unlucky for Some: The Social Impact of Bingo Club Closures". It said that the closures are both a manifestation of, and a catalyst for, the wider breakdown of local communities, with a negative impact on society.
	Bingo halls are essentially clubs for people. They love going to them and spending time with their friends. We should not deny them that opportunity in an attempt to claw back what is a minuscule amount compared to the overall deficit in the Government's finances. It is time that the Government thought again, because the bingo industry feels exasperated and betrayed.
	I urge the Government to wait for legal certainty. They can then think again and ensure that the bingo industry has the future that it deserves.

Don Foster: Other hon. Members have pointed out the vital importance to many local communities of the soft form of gambling entertainment that is available in our bingo clubs. I particularly congratulate the hon. Member for Crewe and Nantwich (Mr. Timpson) in that regard. It has been noted as well that the clubs also provide an opportunity for people to come together and enjoy cheap food and so on.
	It is therefore especially disappointing to hear that more than 30 bingo clubs have closed in the past year, and that more than twice as many have closed since the start of 2007. The result is that many communities have been deprived of a much-loved form of entertainment. The hon. Member for Barnsley, Central (Mr. Illsley) highlighted their importance by referring to the 26,000 members of one club in his area.
	Many of us, knowing that the closures are happening, have campaigned to deal with some of the issues that we believe have caused some of the closures. The hon. Gentleman rightly said that levels of taxation were not the only problem; other factors, such as the smoking ban, have had an effect. It is worth remembering that the Bingo Association supported the smoking ban, even though it recognised that it would cause a problem for its members. I admire the association for making that decision.
	Many of us knew that the real cause of concern was double taxation. Before this year's Budget was announced, the Treasury acknowledged that bingo, one of the softest forms of gambling, was also one of the most highly taxed. I pay tribute to the Government for deciding to end double taxation. As my hon. Friend the Member for Taunton (Mr. Browne) says, the Government took the right decision and they deserve credit for ending VAT on participation fees.

Angela Eagle: I wonder whether the Liberal Democrats support the Conservative amendment, which would delay the removal of VAT on participation fees.

Don Foster: The Minister makes a fair point, and I shall come to it shortly, but before she starts criticising me, I wish to praise her further. The Government also deserve praise for assisting the bingo industry by agreeing to an increase in the number of gaming machines allowed on premises, which will be an important source of additional revenue for clubs. I welcome that.
	Given that those good moves have been made, many of us are extremely surprised that the Government are persisting in, as others have put it, giving with one hand and taking with the other, and pressing forward with a policy that leads to one of the softest forms of gambling being one of the most highly taxed. That strikes many of us as unfair and is likely to lead to problems, particularly if the Government's figures in the Red Book prove to be incorrect—if the High Court judgment goes against them.
	The Minister asks why we might support the Conservative amendment. In one sense, she is right: the amendment, which was well explained by the hon. Member for Hammersmith and Fulham (Mr. Hands), is a delaying tactic, tabled in the hope that the High Court will rule in favour of the bingo industry and not of the Government. Although I think that the hon. Gentleman is right to take a punt on that, our preferred option is to support the SNP amendment, which was eloquently explained by the hon. Member for Dundee, East (Stewart Hosie)—I like to give him credit occasionally. That amendment makes it clear that the bingo industry would be subject to a fair level of taxation.
	The Minister could, rightly, say that it is easy to propose a reduction in Government income, just to garner cheap popularity with bingo clubs. It is therefore incumbent on anyone making such a proposal to make direct suggestions on how the Government could recoup the loss, and I have two or three suggestions to make, which I hope the hon. Lady will consider seriously. I alluded to the basic principle of one of them when I intervened on the hon. Member for Barnsley, Central. I genuinely believe that we ought to shift to a system where the harder forms of gambling are more highly taxed than the softer forms.
	It is bizarre that the duty imposed on a gaming machine on which the maximum bet is £1 is exactly the same as the duty imposed on a gaming machine that has a £100 maximum bet. I genuinely believe that the Government should consider setting differential duties, especially in the light of the Gambling Commission's prevalence studies showing that those higher-stake machines have a higher level of prevalence—in other words, they are more addictive—than lower-stake machines.

Angela Eagle: Has the hon. Gentleman noticed that we are proposing a consultation on moving towards a gross profits tax for amusement machine licence duty?

Don Foster: I am delighted to note that the Minister is proposing that, although we have not yet got there and I am suggesting one way of dealing with the problem. I shall come back to gross profits tax at the end of my remarks, but for now let me stick with higher levels of gambling.
	If we look into the higher end of gambling addiction problems, many of us know that online gambling is a particular cause for concern. The Minister will be well aware that there are about 6,500 internet gambling sites worldwide, which generate about £12.5 billion that is placed by the punters. Sadly, only about 1,000 of those internet gambling sites are regulated anywhere in the world, but it is at least pleasing to know that about 80 per cent. of all the money spent on internet gambling sites is on those regulated ones. Such gambling is extremely addictive, so it is particularly bizarre that we allow a number of internet gambling sites that are regulated outside the UK—whether they be in jurisdictions that we deem to be white-listed or in other European economic area countries—to advertise in this country. We are meant to spend money to check that their regulatory regime is fine. To date, we have made no charge on them whatever; and neither do we insist that they contribute to research, education and treatment in respect of problem gambling. I am delighted that, at long last, the Minister has given me an assurance that the Government are going to look further at this issue; it does provide another potential source of income.
	The Minister also made reference to gross profits tax. Let me tell her that there is a simple way of ensuring that the Treasury recoup any loss that I may be proposing by supporting the amendments this evening—it is by using gross profits tax as the standard way of taxing gambling, and applying it to the national lottery. If such a tax were introduced in the national lottery, as many of us have advocated for many years, it would accrue significant additional income to the Treasury, but, more importantly, it would provide the additional benefit of giving significant extra funds to the lottery good causes, which have recently lost money to pay for the black hole in the Olympic budget.
	Although I am delighted that the Minister has removed VAT on participation and that the Government have allowed for an increase in the number of gaming machines, I am disappointed that they are still going ahead with a higher rate of taxation for bingo than for most other forms—often more addictive forms—of gambling. There are ways in which the Government could change the system to provide for higher rates of taxation on more addictive forms of gambling.

Kelvin Hopkins: I shall be brief. I did not intend to speak, but I heard so many interesting and fine speeches on this issue that I wanted to make my own contribution. I shall visit my own local bingo club on Friday, and I shall express the same views there as I do here.
	I am pleased to follow the hon. Member for Bath (Mr. Foster) and I share his concern about gambling addiction, which I believe is a very serious matter. I was strongly against the super-casinos, which loomed large for a long time, but have now been dispensed with, I am glad to say. Bingo is a very modest form of gambling: it is easily contained; it is not addictive; people do not lose large sums of money. Furthermore, there are even health benefits, as many people who play bingo are middle-aged and might otherwise sit at home; going out and mixing with people is beneficial to health, particularly psychologically, but probably physically as well. It is the same argument that we hear about free travel on buses, as getting people out and about is beneficial to health. The issue is not just about being fair to people, as improving the health of the nation is also relevant. I say that especially since smoking in public places has been banned, which has really made a difference.
	I am afraid that the provisions have the hallmark of Treasury officials all over them. I am not blaming the Exchequer Secretary, but Treasury officials, having been forced to get rid of double taxation, are getting in their little revenge by raising levels of tax in order to get their own back. But we are talking about tiny sums of money—£30 million or £40 million—compared with the £12 billion cost of reducing VAT, the £4 billion we lose as a result of tobacco smuggling, and the £37 billion we lose as a result of tax avoidance. If the Treasury wants to raise more money, as we undoubtedly need to do to pay the vast bills that have arisen from the banking crisis, it should look at those much larger sources of income, rather than adding relatively small amounts in taxation on bingo, which will have a disproportionate effect on those on modest and low incomes. I urge my hon. Friends on the Front Bench to consider more productive areas that will raise large amounts of revenue.
	I am slightly worried about the presence in bingo clubs of fruit machines, which are addictive. However, bingo itself has every kind of benefit, including social, and it is not addictive as far as one can see. Habitual playing of bingo is a bit of fun every week, and is not serious gambling in the same sense as other activities. If we can encourage more people to play bingo, and fewer people to stay at home gambling online, a lot of people would be saved from addictive gambling, losing money and pain. There is everything to be said for encouraging bingo through lower taxation, and discouraging other forms of gambling through higher taxation and more regulation.
	The overall tax gap between the tax that should be paid and that which is actually paid could be as large as £100 billion. If we addressed that, we could raise a lot more revenue. If we could make a 10 per cent. inroad into that, we would have £10 billion a year extra—hundreds of times more than the small amount that would be raised from taxing bingo disproportionately and unfairly. I hope that my few points register with my hon. Friend the Exchequer Secretary.

Angela Eagle: We have had a small, boutique, but extremely well proportioned debate, after many hours on the Finance Bill. I look forward to many more such debates over the next couple of months, as we vacate the Floor of the House and move upstairs.
	Despite some of the comments in the debate, it is wise at this juncture to acknowledge that the effective tax rate for bingo has gone down from what was acknowledged by the Bingo Association in its Budget submission to be 24 to 25 per cent. In a press notice last November, the hon. Member for Dundee, East (Stewart Hosie) said that the effective tax rate was 28.2 per cent. Whatever our feelings, it is reasonable for all of us to acknowledge that the effective tax rate has gone down from between 24 and 25 per cent. to 22 per cent., which some have welcomed.

Greg Hands: Will the Exchequer Secretary tell us who has welcomed the proposals?

Angela Eagle: I was saying that some who have contributed to tonight's debate have acknowledged that the Government's abolition of VAT on participation fees has reduced the effective tax rate for bingo from between 24 and 25 per cent. to 22 per cent. As 22 per cent. is lower than 24 or 25 per cent., I wanted to put it on the record that we are debating, among other things, a reduction in the effective tax rate for bingo.

Greg Hands: I am trying to follow the Minister's argument. Presumably she is saying that the effective rate has come down, assuming that the industry is paying VAT on everything. Is that right?

Angela Eagle: No. Prior to the Budget, the effective tax rate was calculated—and widely acknowledged—to be between 24 and 25 per cent. The Bingo Association acknowledged that. Our assessment was that it was between 24 and 25 per cent., and it might be sensible to remind hon. Members at this juncture that the effective tax rate had come down from 35 per cent. in 2003, so there has been a steady decline in the effective rate of taxation on bingo. It went down from 35 per cent. in 2003 to between 24 and 25 per cent. prior to the Budget, and when the Budget is put into effect, the rate will go down to 22 per cent. Those are facts, acknowledged widely in the industry and featured in the Bingo Association's Budget representations.

Greg Hands: Again, I thank the Minister for giving way; she is being most generous. Why, then, is every single bingo operator, as far as I am aware, saying that as a result of the changes, they will be paying more tax? Why have various City analysts issued profit warnings for the sector, due to the negative impact of the overall package of changes? She still seems to be saying that the changes are welcome overall, when the industry is saying precisely the opposite.

Angela Eagle: The industry can have any opinion that it likes about the taxation system that applies to it. I am not responsible for the opinions of the bingo industry; it can welcome the measures or not. What I am talking about is the effective tax rate. Prior to the changes that we are suggesting in the Finance Bill, the effective tax rate for bingo consisted of VAT participation fees at 17.5 per cent. and the bingo duty of 15 per cent. Removing VAT fees and increasing bingo duty to 22 per cent. means that the effective tax rate is 22 per cent., not the 24 to 25 per cent. figure that was acknowledged by all sides prior to the Budget, and that featured in the Bingo Association's Budget submission. In fact, the hon. Member for Dundee, East, quoted a 28 per cent. figure last year, but those of us who were involved with the Finance Bill last year will remember that there was widespread acknowledgement that the effective tax rate for bingo, taking the factors that I mentioned into account, was between 24 and 25 per cent.

Don Foster: The Minister is making heavy weather of the point. Most of us entirely agree with her analysis, on the assumption that the Government win the High Court case. The effective overall level of taxation that the industry would now suggest is different, because of course it has stopped paying VAT on interval betting. Surely that is the difference. Could we perhaps move on?

Angela Eagle: I was responding to the questions that I was asked by the hon. Member for Hammersmith and Fulham (Mr. Hands); I was attempting to be helpful. The hon. Member for Bath (Mr. Foster) is right that when there is a VAT tribunal in progress, and there is an interim judgment, it applies only to the case in question, not broadly across the piece. Any other companies that have somehow decided that they ought not to be liable for VAT on participation fees because of the prospect of a judgment that has not yet been made are not exactly being up front about the circumstances. Her Majesty's Revenue and Customs makes it quite clear in all VAT tribunal judgments that the judgments apply only to the case before the tribunal, and that if there is any read- across, the issue of the VAT liability of other companies is still expected to be set aside until the tribunal is fully over—and it could carry on for some time yet.

Greg Hands: I thank the Minister again for giving way. In the Westminster Hall debate in February—that was the last time everybody had the opportunity to debate the issues—she said:
	"The fact that the dispute is ongoing means that it is inappropriate for me to discuss in detail issues relating to fiscal neutrality."—[ Official Report, 27 February 2009; Vol. 488, c. 132WH.]
	Surely there has been a complete volte-face since she gave that opinion in February.

Angela Eagle: I do not understand why the hon. Gentleman thinks that. Budgets are an opportunity to examine tax rates and arrangements in all areas, and announcements on these issues are always made at Budgets. They are certainly not made in the middle of Westminster Hall debates, when the work leading up to the Budget is still ongoing.
	Our principal aim in the Budget with respect to gambling taxation has been to simplify the tax regime and bring increased clarity to the sector. Clause 20 is part of that package of reforms to gambling taxation. It has two elements. First, it increases the rate of bingo duty to 22 per cent., as has been pointed out. Secondly, it increases the money prize limit to £70, as the hon. Member for Bath was generous enough to point out, for duty-exempt small-scale bingo conducted on certain premises. The increase in the rate is part of a package of measures that includes making bingo participation fees exempt from VAT, which will be debated upstairs on clause 112. The principal aim has been to simplify bingo taxation, as the industry had requested.
	The three amendments to clause 20 have different objectives, but they all relate primarily to the aspect of the clause that amends the bingo duty rate. Amendment 9 seeks to commit the Government to publish a report on the impact of changes made at the Budget. We always keep taxes under review and we take decisions at the Budget. Gambling taxes are no different, and we will continue to engage with the industry about the state of the industry and the impact of taxation and potential taxation measures. There is therefore no need for the Government to publish a report on the impact of increases in bingo duty later this year.
	Amendment 14 seeks to retain bingo duty at 15 per cent. Amendment 15 seeks to delay the increase in bingo duty until after court proceedings have concluded and Parliament has again debated the taxation of the bingo industry. The hon. Member for Hammersmith and Fulham has been up front with the Committee today and said that the official Opposition will vote against clause 112 when we come to that debate, to remove participation fees from bingo as part of that package. I look forward to having that debate with him when the time comes.
	Both those amendments would cost money—£35 million, on the basis of figures in the Red Book. The effective tax rate on bingo is now 22 per cent., as I said earlier, comparable to the average rates of tax on casinos, gaming machines and the lottery. It is not clear why the Government should await the conclusion of a court case before deciding on an appropriate rate of tax for the bingo industry. I therefore ask hon. Members to withdraw their amendments.

Stewart Hosie: We are pleased with the debate. The hon. Member for Barnsley, Central (Mr. Illsley) is a champion for the sector and I am delighted that he brought his experience to the debate. The hon. Member for Hammersmith and Fulham (Mr. Hands) focused on the VAT case and explained his party's anger at the Government's attitude towards it. The hon. Member for Taunton (Mr. Browne) spoke to his amendment 9, but I am delighted that he could bring his party to support my amendment 14 as well.
	The hon. Member for Crewe and Nantwich (Mr. Timpson) described the current position as untenable and unfair, and described the 20,000 members of his local bingo club, which is almost a third of the entire population of the town of Crewe. That is quite phenomenal. He called on the Government to wait for legal certainty. The hon. Member for Bath (Mr. Foster) focused on the social benefits. The hon. Member for Luton, North (Kelvin Hopkins) spoke about the health benefits of socialising and also said that the clause had the hallmark of the Treasury officials all over it. I shall not comment. Perhaps he knows these things better than I do.
	The Minister began by describing this as a boutique debate. The reality is rather less elegant than that sounds, but it was still a good debate. She then spoiled the mood by trying to justify the Government's position, which is still 22 per cent. against 15 per cent.
	Members in every party, and every speaker apart from the Minister, want to see the unfairness removed from bingo. It is simple. The tax on online bingo is 15 per cent., on online poker and casino 15 per cent., on sports betting in a betting shop 15 per cent., on betting exchanges 15 per cent. and on football pools 15 per cent. The Government want good licensed bingo clubs to pay tax at 22 per cent. I think 15 per cent. will do, and I ask the Committee to support the amendment.

Question put, That the amendment be made.
	 The Committee divided: Ayes 77, Noes 278.

Question accordingly negatived.
	 Amendment proposed: 15, page 12, line 19, leave out from 'effect' to end of line 20 and insert
	'as the Treasury may by order provide.
	(4A) An order under subsection (4)—
	(a) shall be made by statutory instrument,
	(b) may not be made unless a draft has been laid before and approved by resolution of the House of Commons, and
	(c) may not be made until proceedings in the High Court in relation to The Commissioners for Her Majesty's Revenue and Customs vs The Rank Group plc (CH 2008/APP/0448) have concluded.'.— (Mr. Hands.)
	 Question put, That the amendment be made.
	 The Committee divided: Ayes 75, Noes 282.

Question accordingly negatived.
	 Clause 20 ordered to stand part of the Bill.
	 The Deputy Speaker resumed the Chair.
	 Bill (Clauses 7, 8, 9, 11, 14, 16, 20 and 92) reported, without amendment, and ordered to lie up on the Table.

Business without Debate
	 — 
	European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Climate Change Agreement

That this House takes note of European Union Document No. 5892/09 and Addenda 1 to 3, Commission Communication on Towards a comprehensive climate change agreement in Copenhagen; and believes that the Commission's suggestions therein provide a sound basis for discussion between the Government and other Member States' governments in advance of the 15th Conference of the Parties in Copenhagen in December 2009.  —(Ian Lucas.)
	 Question agreed to.

Cervical Cancer Vaccination

Motion made, and Question proposed, That this House do now adjourn. —(Ian Lucas.)

Crispin Blunt: I am grateful for the opportunity to highlight concerns about the human papilloma virus vaccine Cervarix, which, contrary to Government assurances even yesterday, appears to be causing adverse reactions in a number of teenage girls, and to raise concerns about the cost-benefit analysis process that has led to that vaccination programme, the manner in which it is being delivered and the yellow card warning system.
	I only became concerned about the possible side effects of the Cervarix vaccine—and, I confess, aware of the vaccine itself—when the experience of one of my constituents, Rebecca Ramagge, was brought to my attention. Rebecca's mother came to see me at my surgery 12 days ago and told me how her daughter had fallen ill shortly after her first injection with Cervarix. Over the full course of the injections, she has gone from being a healthy sports-loving teenager who was a high achiever at school and a tournament-level tennis player, to being crippled by chronic fatigue syndrome, unable to attend school regularly and in need of help with basic tasks such as walking and eating because of the exhaustion and the muscular and joint pain from which she is now suffering.
	Despite experiencing serious joint pain and illness shortly after the initial injection in September 2008, Rebecca went on to receive the two follow-up jabs as the vaccinations were administered at school. Her family doctor was therefore unaware of the listed side effects of the drug and unable to link Rebecca's deteriorating condition to the vaccine. It was only after Rebecca was referred to a consultant paediatrician at East Surrey hospital, Dr. Jawad, that her symptoms were identified as highly consistent with a reaction to the vaccine.
	The consultant in question was astonished that nurses had administered the third injection to Rebecca when she was complaining of a recognised side effect listed in the product information as a common side effect of the vaccine. That raises the wider question that I will come to shortly, of whether school is an appropriate environment in which to vaccinate children.
	Rebecca's case is not an isolated one. Similar stories of severe reactions resulting in partial paralysis, seizures and chronic fatigue have been well featured in the national press. The vaccine support group JABS—Justice Awareness and Basic Support—has nine girls registered as suffering from severe adverse reactions to Cervarix. A solicitor who specialises in representing vaccine victims is representing six girls who are suing the makers of the vaccine, GlaxoSmithKline, under the Consumer Protection Act 1987. Yesterday however, the Minister gave me a parliamentary answer that included the following:
	"To date almost one million doses of Cervarix have been given in the UK and there is no evidence to suggest that Cervarix vaccine has caused chronic fatigue syndrome, paralytic disorders or any other serious or long-term side effects."—[ Official Report, 12 May 2009; Vol. 492, c. 706W.]
	For any vaccine, it is always probable that there will be a small number of people who have an adverse reaction. However, there are serious questions to be raised about this vaccine and its administration, the quality of the information available about its risks, and how it has been promoted by the Government.
	First, it is notoriously difficult to establish firm medical proof of a causal link between a vaccine and severe medical conditions previously unrecognised as side effects, but when a group of healthy teenagers suddenly begins to exhibit similar debilitating symptoms shortly after receiving the same vaccine, it is surely only sensible provisionally to conclude, even in the absence of concrete proof, that the common factor in all the cases—the vaccine—is the likely cause.
	I was particularly disturbed to hear from the hon. Member for Bootle (Mr. Benton) about the case of a girl who collapsed in pain hours after having the Cervarix jab in school. She has been in hospital ever since. The hospital has carried out a number of tests, but has so far been unable to establish the cause of her condition. Instead of exhausting the tests available to it by carrying out the hair trace test requested by the girl's family—who have been told they will have to pay for it privately—it has concluded that the condition is all in the girl's mind, a result of mental abuse by her mother who, convinced that her daughter has reacted badly to the vaccine, is projecting her conviction on to her daughter. I am told that it is now proposing to take this girl into care, but, in light of Rebecca Ramagge's experience, I am concerned that medical professionals have resorted to accusing members of this family of suffering from psychiatric disorders while not being prepared to test their thesis exhaustively.
	There is also the case referred to me by my hon. Friend the Member for Newark (Patrick Mercer) regarding his 18-year-old constituent who since having the HPV vaccination has started to suffer from frequent seizures—40 in the last nine weeks—that have left her unable to drive or to continue with her college course. Again, doctors are having difficulty diagnosing exactly what is wrong with her, and have started to hint that her problem may be mental rather than physical. There is also the case in Honiton—and my hon. Friend the Member for Tiverton and Honiton (Angela Browning) is present to listen to this debate.
	I hope my constituent's experience will provoke a reassessment of these and other cases. Unless further proof emerges of another common factor between the affected girls that could have caused their condition, surely the only responsible course of action is to admit that the vaccine may have undesirable side effects for some girls, and to ensure that the public are aware of the risk, however small, they are taking when choosing to have the vaccine. In summary, the Government's current understanding—given to me yesterday by the Minister, I am quite sure in good faith—is flat wrong.
	Secondly, it is my assessment that the public have not been provided with clear and accurate information about the risks associated with the Cervarix vaccine. GlaxoSmithKline's product information gives a full list of undesirable effects that the vaccine might cause. Among those listed are serious conditions such as myalgia—listed as being very common—arthralgia and paraesthesia. Legal representatives of Cervarix victims point out that in many of the cases in which they are representing them, paraesthesia is so severe that the effect should be more accurately described as partial paralysis.
	The information provided to patients by the NHS, however, is much briefer and far more reassuring in tone. The NHS immunisation website lists the most common side effects as mild to moderate swelling, redness and pain at the site where the injection is given. It also lists symptoms such as slightly raised temperature, sickness, dizziness, diarrhoea and muscle aches as other mild side effects that have been reported. Without repeating the full details, I can tell the House that nowhere within this NHS information is there any indication that symptoms reported as suspected side effects have in some cases been both serious and persistent—for example, the chronic debilitating muscle and joint pain experienced by my constituent—nor does it give a full list of the symptoms. It misses out headache—although that is listed as a very common side effect—upper respiratory tract infection and paraesthesia, which are all included in the literature from GSK.
	This is not just about patients and their families; general practitioners, too, rely on the NHS's information, but they are not being directed to GSK's more comprehensive data and they are therefore not looking for reactions. I know of GPs who, on the back of Rebecca's experience, have called staff meetings to alert their colleagues, and even in the past week those GPs now believe that they too are recognising symptoms. I am told that NHS Direct has no drop-down box to guide operators to ask, in the event of these symptoms being reported, whether the patient has recently had the Cervarix vaccine.
	The Medicines and Healthcare products Regulatory Agency's latest figures show that they have received 1,602 reports of suspected reactions, including 161 recipients complaining about "pain in extremity" at the injection site. As I will explain, that is likely to be a serious understatement. In the light of this and the severe nature of some of the adverse reactions reported, I ask the Minister to consider as a matter of urgency changing the information that the Government provide GPs, families and NHS Direct, not only so that families and patients may make the informed choice to which they are entitled, but so that the potential symptoms are properly identified and linked. Failure to do that will open the Government to the charge of being simplistic at best and irresponsible at worst.
	Thirdly, I am concerned about the Government's blanket promotion of this vaccine as a silver bullet against cervical cancer. Reservations have also been expressed by some medical professionals about the thoroughness of the clinical trials, which they have claimed were too short and did not include enough girls under the age of 16, who have been the first age group to receive this vaccine as part of the Government's national programme. Gynaecological experts such as Diane Harper, director of the gynaecologic cancer prevention research group at Dartmouth medical school, have urged for the introduction of the vaccine to be delayed, so that any future side effects have time to manifest themselves.
	The Government have refused to produce any open data on the cost-benefit analysis they undertook in choosing Cervarix. Sexual health charities, such as the Terrence Higgins Trust and the Brook Advisory Service, have expressed dismay that the Government have not followed the example of nearly every other western country in choosing the rival vaccine, Gardasil, which protects against a greater variety of pre-cancerous lesions than Cervarix, and genital warts as well. The Government's only public response has been that they made their decision according to "pre-agreed criteria", which they apparently will not disclose.

Dawn Primarolo: That is not true.

Crispin Blunt: The Minister says that that is not true. I do not know whether it is, which is why I used the word "apparently". She will have the opportunity to reply and make that position clear. I want to make it clear that I am entirely new to this matter and have had two weeks to learn and understand it, but in that period I have grown very concerned, which is why we are having this Adjournment debate.
	It is open to question whether the Government have factored in to their cost-benefit analysis the savings that they might make on the cost of treatment for genital warts. It is also unclear whether there was an adequate analysis of the costs that might be incurred through compensating the victims of adverse reactions; that would apply in respect of Gardasil as well.
	Another issue that I would like the Minister to address is the actual delivery of the vaccination. A school that had a number of pupils take part in the original trials of Cervarix, St. Monica's Roman Catholic high school in Manchester, has decided not to opt in to the nationwide vaccination programme, citing concerns about the effectiveness of the drug and the side effects it caused in a number of its pupils who underwent the trial. It also cited its opinion that school was not an appropriate environment in which to vaccinate children.
	There will always be a handful of adverse reactions, some serious and some involving symptoms previously unrecognised as side effects. It would surely be much safer if vaccines were administered in an appropriate medical environment by a professional who had ready access to the recipient's medical history and where the potential risks and side effects had been properly evaluated and discussed. That would enable the recipient and their family to have a full understanding of the potential costs and benefits of the vaccine being offered to them. I therefore ask the Government to review their current policy of administering nationwide vaccination programmes in schools. Had such an approach been the norm, it is unlikely that my constituent would ever have been given the third dose of the vaccine, which exacerbated the side effects.
	HPV is most commonly spread through sexual contact and, while I am aware that a proportion of girls are sexually active from a very young age, many are not, and some parents may feel that it is unnecessary for girls to receive this vaccine so early in their teens when they are still growing quickly and experiencing rapid hormonal change. Educating girls about the dangers of HPV, how it spreads and the measures that they can take to protect themselves against it, such as using contraception, should also play a part in combating HPV. Parents should be able to access this debate to make informed choices.
	If I had more time, I would wish to raise the more general point of compensation for victims of adverse reactions. There is no doubt that vaccination brings great benefits to society at large, but it also carries an inherent risk of serious reactions that will affect a minority. The UK's compensation scheme has been described as "hopelessly flawed" by legal experts and leaves many with no option but to sue pharmaceutical companies under consumer protection legislation. This is an expensive and exhausting process for claimants and it sparks widespread and sometimes unfounded fears about the safety of vaccination programmes.
	On the basis of what I know now, I suggest that we examine the US vaccine compensation scheme, which awards damages to successful claimants according to the severity of their injuries and the costs they are likely to incur as a result. That does away with both an arbitrary and insufficient award and an artificial extent of injury qualification.
	I would like to finish by highlighting the inadequacies of our system for reporting adverse reactions to vaccines. The yellow card system operated by the MHRA is not mandatory so there is no obligation on medical staff to report reactions. Furthermore, the scheme has such a low public profile that many who suffer from a reaction after a vaccination are not aware that there is a system for reporting their experience. Indeed, I spoke to a school nurse today at random and she was unaware of the scheme. The yellow card scheme was described to me by a managing director of a pharmaceutical research company yesterday as
	"one of the weakest in Europe".
	Do the Government have any plans to strengthen the current system and make it fit for purpose?
	The Government have so far been determined to push on with this blanket vaccination programme while paying little heed to the serious concerns raised about the safety of the vaccine, the quality of information readily available to those considering the treatment and the possibility that promoting alternative preventive measures may be a more suitable and less risky path for some girls. I would be grateful to hear from the Minister that the Government will not continue down this incautious path based on the alarming and inaccurate information given in the parliamentary answer to me yesterday, but will take account of the experiences of my constituent and those of other hon. Members.

Dawn Primarolo: I congratulate the hon. Member for Reigate (Mr. Blunt) on securing this debate. My thoughts are with the young people about whom he spoke. I join him and other hon. Members in wishing them a full and speedy recovery and I shall say more in a moment about the individual cases.
	I shall start by sounding a caution. When we debate sensitive issues such as this, it is important to deal with the science, not the supposition, and with the evidence, not the hearsay or opinion. We should not be swayed by the lurid way in which HPV and its vaccine are sometimes portrayed in the media. We have played this game before with the MMR scare and many areas are now paying the price in an explosion in measles and mumps cases because not enough families have taken up the vaccine. I want to take this opportunity to address head on the suggestions that the HPV vaccine is not safe.
	Before licensing, Cervarix was rigorously tested and found to have minimal side effects. Scientists conducted large-scale clinical trials, involving thousands of girls and young women, to assess its safety. Since then, several million doses of vaccine have been given around the world—including the best part of 1 million in the UK, as the hon. Gentleman said—with no new risks emerging.
	There are, of course, side effects associated with Cervarix, as there are with all vaccines, but it is important to stress that most people do not experience any side effects whatsoever. The most common known effects from Cervarix are injection site reactions, dizziness, headache, muscle pain, nausea and upset stomach. They are normally mild and last for no more than a few days. I accept that those reactions can be unpleasant, but they are nothing compared with the symptoms of advanced cervical cancer and are a price worth paying, in my view, to save 400 lives a year.
	There is a clear need to keep a watching brief, and we are continually monitoring safety so that we can quickly identify any new side-effects that might emerge. I completely reject the hon. Gentleman's proposition that somehow our regulatory and monitoring system is weak or substandard—it is one of the best. Every week, the Medicines and Healthcare products Regulatory Agency publishes online analysis of all suspected side effects reported through its yellow card scheme. We know that almost 1,700 suspected side effects have been reported since the immunisation programme was first introduced, but those figures come with a caveat. That is not my personal view as an individual; it is based on the scientific evidence and advice we are given.
	The figures do not necessarily mean that the vaccine caused the medical condition, only that the reporter suspected it might have. On investigation, we find that 90 per cent. of those reports—to put it into perspective, that is about 1,500 reported cases out of 1 million, or 0.0015 per cent. of total vaccines administered—either relate to the known side effects that I have already mentioned, or they were psychogenic events: that is, symptoms linked to a fear or anticipation of the needle injection. Those psychogenic events cover a number of girls who fainted after the injection, which is a known response to all needle-based vaccinations and is running at a rate that is in line with what experts would expect.
	In the remaining 10 per cent. of cases—let us remember that we are talking about 0.00017 per cent. of the total vaccines—there is good reason to think that the reported symptoms were associated with an underlying condition or illness that the person was suffering from at the time they had their vaccination. That, in fact, appears to be the most likely interpretation for the cases reported in the media recently, including the cases in the  Daily Express and  Daily Mail of the young girls who were reported as suffering from partial paralysis, chronic fatigue syndrome and fits since having their vaccination. The MHRA is fully aware of those cases, several of which were reported via the yellow card scheme, and is investigating them.
	As we vaccinated such a large cohort of young people, it was inevitable that a few cases would come forward where other conditions were reported as suspected side-effects even if the vaccine played no part. Indeed, the MHRA's statistical analysis of paralytic disorders and chronic fatigue syndrome shows that the reported frequency of such cases is no more than—or should I say the same as—would have been expected among a similar cohort of unvaccinated teenagers. In addition, the Government's independent advisory body, the Commission on Human Medicines, looked into the reports not just in the UK, but across the world and concluded that there are no new safety issues associated with the vaccine.
	I realise that that is no consolation or comfort to the girls to whom the hon. Gentleman has drawn attention. Equally, however, it is no reason to condemn a programme that has seen more than a million teenagers receive injections with little or no reported effect.
	The Government are committed to transparency and the hon. Member for Reigate can be assured that any emerging information on the possible side effects will be fully evaluated. We will take appropriate action promptly when any true side effects are detected but, alongside that transparency, we need to maintain public trust and confidence. The facts speak for themselves, and they remind us why we introduced the vaccine in the first place.
	We know that at least half of all sexually active women will be infected by a strain of HPV in their lifetime. We know that the viruses are responsible for causing more than 99 per cent. of cervical cancer cases, and a range of other cancers. There are nearly 3,000 cases of cervical cancer each year, a third of which will prove fatal within five years, and we know that the HPV vaccine is effective in protecting young women against two HPV strains that are responsible for around 70 per cent. of those cancer cases. As a result, the vaccine could eventually prevent up to 400 deaths due to cervical cancer every year.
	So the facts tell us that the Cervarix vaccine is a major breakthrough in public health, and the first vaccine that can directly prevent cancer. It would be a travesty if women were denied the potential that it offers because of scaremongering and supposition. The weight of evidence says that the vaccine is safe, effective and capable of saving thousands of lives in the years ahead.
	The hon. Member for Reigate talked about lack of information. Tomorrow, I shall do him the service of referring him to my parliamentary answers detailing the conditions for the contract negotiations and on which the contracts were judged. I will not be able to give him any information that is commercially confidential, but the House has received a very full explanation of the matter, both in writing and in parliamentary answers to individual Members.
	I believe that we should support and celebrate the saving of women's lives from a preventable illness. I advise the hon. Member for Reigate that reports that the vaccine is not safe are incorrect, as are those suggesting that it lacks the confidence of the scientific community. I assure him that the Government, like any other, will always remain vigilant in respect of the vaccination programme.

Crispin Blunt: I have heard the Minister's answer. On one level, I understand the requirement for an uncompromising public health message on the need for a vaccination programme, and I am not suggesting that there is a wider case against the vaccine. What I was hoping to hear from the right hon. Lady was that, as symptoms start to emerge and based on the evidence that I have presented this evening, the Government would start to think about whether those who are administering the vaccine are looking for reactions properly, because they have not been alerted to them. Any vaccination programme has a number of reactions associated with it, and the body of evidence emerges as more people are vaccinated. I have to say that I was disappointed by the tone the Minister took and the apparent lack of open-mindedness to the new evidence emerging.

Dawn Primarolo: I, too, saw the e-mail the hon. Gentleman sent to all Members of Parliament, asking for details of any cases. However, his case tonight is based on some conversations that he has had and some discussion with someone in a school about whether they were aware of something. Based on that, he has tried to advance the case that all the science, all the evidence and all the information that the Government have are not true. His central question to me, which I have answered, is why I believe that the vaccine is safe and why I believe it is appropriate to give that vaccine. I agree absolutely with the hon. Gentleman that any Government, regardless of their confidence now, would stay vigilant and look at all the reports on the vaccine—as we do monthly.
	 Question put and agreed to.
	 House adjourned.

Deferred Division

Equality Bill (Carry-over)

That if, at the conclusion of this Session of Parliament, proceedings on the Equality Bill have not been completed, they shall be resumed in the next Session.
	 The House divided: Ayes 331, Noes 136.

Question accordingly agreed to.